S&P 500 Maintains 68-Day Streak Above 20-Day Moving Average as Volatility Risks Rise

Key Takeaways:The S&P 500 has traded above its 20-day moving average for 68 consecutive sessions.The VIX Volatility Index has dropped nearly 45 points since April, hitting a five-month low.Analysts expect a potential spike in volatility beginning in August, based on historical patterns.The U.S. equity market is showing signs of potential turbulence after an extended period of low volatility and consistent gains. According to a new analysis from The Kobeissi Letter, the S&P 500 has now remained above its 20-day moving average for 68 straight trading days — the longest such streak since the 1990s.Meanwhile, the CBOE Volatility Index (VIX) — widely considered Wall Street's "fear gauge" — has plunged approximately 45 points since April, currently hovering near 15, its lowest level since mid-February.Historical Trends Suggest Imminent Volatility SpikeHistorically, U.S. stock market volatility tends to remain subdued from May through July. However, data shows that volatility typically picks up in August, with the VIX often rising by about 5 points (or 30%) over the following three months.The extended bullish trend in the S&P 500 combined with historically low volatility raises the question of whether the market is overdue for a correction or a volatility shock, especially as macro uncertainty grows.What’s Fueling Investor Caution?Economic Data: Weaker U.S. job growth and shifting interest rate expectations are prompting investors to reassess risk.Macro Risks: Tariff escalations, Fed policy ambiguity, and geopolitical tensions may all contribute to rising uncertainty.Technical Indicators: Prolonged trading above short-term moving averages can signal overextension, often preceding a pullback.Volatility Could Be Reentering the PictureIf the historical pattern holds, market participants should brace for an increase in volatility through August and September, periods that often coincide with higher trading volume and sharper price swings.While the current trend has favored bulls, analysts caution that the next phase of the market may be defined by greater turbulence and shorter-term positioning, especially as traders digest the latest macro developments.