The fear index VIX has fallen to its lowest point of the year, and the S&P 500 has received 12 consecutive weeks of net inflows of funds, but institutions are warning of increased risks of selling in the autumn According to BlockBeats, on August 17th, the Chicago Board Options Exchange Volatility Index (VIX) fell sharply to 14.2, hitting its lowest level since 2026. Against the backdrop of the "panic index" bottoming out, the S&P 500 index has surged by about 16% this year, with stock funds recording net inflows for 12 consecutive weeks, driving the US stock market to rise for three consecutive weeks and repeatedly breaking historical highs. Jonathan Krinsky, Chief Market Technical Analyst at BTIG, pointed out that since October last year, the market has never experienced an extreme single day sell-off with a trading volume of up to 80% of falling stocks. The historical average is 21 times per year, and there has never been a year with less than 5 times. Susquehanna described the current volatility reset as a 'substantial' decrease, but also pointed out that the implied volatility over a two month period has slightly rebounded to 13.5%, approaching pre Iran conflict levels. Axel Rudolph, Chief Technical Analyst at IG, emphasized that despite no signs of easing in the Middle East and ongoing tensions in the Strait of Hormuz, overall volatility continues to decline, and the unexpected 0.6% drop in retail sales in July indicates that consumers are feeling financial pressure. Wall Street institutions generally consider mid August to mid October as a historic period of market turbulence. The BTIG statistical model shows that in every midterm election year since 1990, the equally weighted S&P 500 index has experienced a pullback of at least 7% from its average high on August 18th to mid October. Krinsky bluntly stated, 'We are currently in a window period in history that is prone to downward volatility, and the starting point for entering this period is the historical high point and the VIX annual low point.'. He suggested that investors reduce their risk exposure or hedge their broad-based stock positions. "Historical experience tells us not to be too comfortable when entering the worst period of the midterm election calendar." Rudolph also warned that in situations where volatility is extremely low and risk continues to accumulate, investors may seriously underestimate the fragility of a rebound in the face of new negative news shocks. The real economic outlook reflected by the long-term US bond yields hovering at the cycle high point is in stark contrast to the optimistic expectations implied by the stock market rebound. [Original link]