The volatility index (VIX), also known as the Fear Index, touched an all time peak of 86.63 on 24 March 2020. This is higher than its historic closing peak of 85.13 in November 2008. It is essential for the VIX to subside to lower levels for the markets to bottom out. Till the time the VIX remains high, every bounce will be met by aggressive selling in the markets. In fact, Morgan Stanley has pointed out in a note that volatility needs to stabilise before the broader markets show some semblance of getting back to higher levels. This was the trend seen in previous occasions when the markets had fallen along with a rise in VIX as in the years like 2008, 2011, 2015 and 2018. Such high levels of implied volatility indicate the markets are firmly under a bear grip. The basic rule is that unless IV cools down huge swings both ways cannot be ruled out. The maximum the IV has ever touched is 92 ion 2008 on an intraday basis. If VIX touches 100, it theoretically means that index can either double or become zero. That is a fairly scary situation for the markets.