Gavekal Capital: An Inverted VIX Curve and the S&P 500

Friday, July 18, 2014

An Inverted VIX Curve and the S&P 500

Demand for increasing protection against stock losses increased yesterday, as the price of the VIX jumped relative to the price of its own futures. In the past, an inversion between the spot and 3-month prices has signaled a decline in the S&P 500.

Just one more in a long line of indicators that would seem to signal the need for a more defensive stance.

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
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