Volatility of the NASDAQ-100 spiked in the spring and quickly fell as stocks rebounded. However, volatility (orange line) remained elevated above 30 while the NASDAQ-100 (blue line) was reaching new highs.
A similar pattern occurred during the Global Financial Crisis. Even the peak in volatility was similar at roughly 80. Of course, this COVID-19 crisis is ongoing so it remains to be seen where stocks and volatility go from here.
But, we already have seen the NASDAQ-100 reach new highs only months after the peak prior to the virus. It took several years for the same rebound to occur after the GFC.
COVID-19 likely accelerated some trends that were in place prior to the virus, boosting tech firms that are prominent components of the index. Fed liquidity and fiscal responses helped fuel the markets too. Have markets, especially growth, tech and momentum, rebounded too far and too fast? More to ponder.