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By Anna J. Park

The current movement of the VIX index, which is often referred to as a fear gauge of stock markets, is hinting that markets haven't yet hit bottom.

The VIX, standing for the Chicago Board Options Exchange's CBOE Volatility Index, has been popularly used to measure market sentiment on volatility, as it is derived from S&P 500 options for the 30 days following the measurement date, reflecting the market's expectation of 30-day forward-looking volatility.

The index has been hovering within a range of 20 to 25 during the past month: the highest level logged in that period was 25 on Dec. 12 and the lowest was 20.07 on Dec. 21. Since then, the index has been hovering rather stably between around 21 and 22, with the last figure standing at 21.67 on Dec. 30, which was the last trading session of 2022.

Market analysts view the VIX's rather subdued moves suggest that the current bear market could last for a while, as the index tends to skyrocket ahead of market crashes.

Records showed that the fear gauge spiked up to 72.67 during late November 2008, heralding the stock market's rock bottom in the following months in early 2009. Such a pattern emerged again in March 2020. The index rose to 57.83 on March 13, preceding the market plunge on March 20.

Excepting such major events, the index normally stays in the range between 20 and 30. Based on such analysis, greater volatility is expected ahead when the index rises above 30, and the index staying below 20 tends to signify market stability.

Considering that the index above 40 is seen as the lowest threshold for signaling the stock market bottoming out, the global stock market is interpreted to be still far from its bottom, despite last year's falls. The S&P 500 index fell by 19.4 percent last year, and the tech-heavy Nasdaq plunged by 33 percent. Korea's main benchmark KOSPI also fell by 25 percent last year.

On Tuesday's trading, the KOSPI closed at 2,218.68, down 0.31 percent from the previous day. It fell below 2,200 during the morning session for the first time in almost two months, as institutional investors dumped shares amid growing recession woes. The index, however, recovered slightly on positive expectations for the semiconductor industry as well as the rise of the Chinese bourse.