January was a month that produced returns worthy of a year. Is that good? Yes and no.

The leading equity index for January was the Russell 2000 that made 11.19% in January. The negative to that is that the same index fell -22.66% in the fourth quarter, October through December. So one had to lose a ton to make back a hand full.

Meanwhile, the S&P 500 made 7.87% in January. The S&P 500 began October of 2018 at 2913.98 and ended the year at 2506.85. Currently, it finished January at 2704.10 and yesterday at 2706.05.

So the good news is that if you were in cash at year end, got invested then you are banking some major coin. If not and you were invested, then you are still trying to recover losses.

Sometimes the best absolute returns come after nasty drops. Is there more upside ahead? Maybe but probably there is a greater likelihood of a test of some lower levels before moving beyond 2700 on the S&P 500 for good.

Since the fourth quarter of 2012, we have tracked all up and down moves on the S&P 500. If Tuesday’s close was the peak, then the move was 16.44% or 353 S&P 500 points. The average move from the fourth quarter of 2012 is 7.42%. This move was the second best performer if the move is complete. In total, there have been 36 such up moves.

The best gainer was from 8/18/17 through 1/26/18 when the S&P 500 moved up by 18.44% or 447.32 S&P 500 points. That move was followed by a drop of -10.16% over 13 days. Volatility may seem to have disappeared again but if we went back a year we could have said the same thing on January 26^th.

On February 5, 2018 the VIX rose by 20 points in a single session. Some called this event "Volmageddon."

Could Volmageddon 2 be staring us in the face? We will need more evidence to make such a claim but it is pretty obvious the easy money is on this move.

Geoff Garbacz is the co-founder and one of two principals in Quantitative Partners, Inc. (QPI). Geoff and his team at Quantitative Partners have over 36 years of experience on Wall Street. Prior to the formation of QPI in 1995, Geoff worked for The Robinson Humphrey Company from 1990 to 1995.