Until early 2018, the market had been behaving in a consistent pattern for several years. Corrections were short-lived, as were spikes in implied volatility-as measured by the CBOE Volatility Index (the VIX)-from otherwise suppressed levels. While the correction in Q4 2018 was longer-lived, we have already bounced back from this drawdown, with the promise of prolonged monetary accommodation by the U.S. Federal Reserve (the Fed).
S&P 500 and VIX since 2017
Source: Russell Investments and Bloomberg
Despite the recent rebound, 2018 was different than 2017, and arguably a more normal year in terms of average