Capital Markets Summer 2022: Revealing Recession Patterns
Sentiment Bottom Signals Recession Handbook
• Various sentiment indicators such as fund flows, put-to-call ratios, insider buying and implied volatility (VIX) can help identify equity troughs
‒ History shows that high levels of fear have led to strong equity returns
S&P 500 1-Year Total Return from Various VIX Index Levels
Being contrarian during extreme market sentiment may be wise
Source: FactSet and Alger. January 1990-June 2022. Ensuing returns have been measured from the day the VIX hit each level. The performance data quoted represents past performance, which is not an indication or a guarantee of future results.
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