The VIX (Volatility Index) measures market volatility expectations, and when it spikes above the $20 danger zone but quickly drops back below, it indicates that markets may have overreacted to a particular event or news, suggesting the initial fear was temporary rather than sustainable.
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VIX Jumps: Danger Zone or Market Overreaction? #shorts
Added:Now, the VIX also got a massive, massive jump from 15 to 2160.
Anything above this kind of $20 range is pretty pretty much a danger zone, but the fact that we quickly gapped beneath it shows that markets might have overreacted.
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