Back in August Doug Kass of Seabreeze Partners called attention to a nerve-wracking chart that suggested a market crash was upon us. It compares the Standard & Poor’s 500 ( SPX) index with the VIX index, which shows a striking parallel to low VIX and an imminently steep decline in the markets. The VIX indexes the volatility of all of the stocks in the S&P 500. That means if the S&P 500 is highly volatile, the VIX index climbs. VIX values above 30 typically reflect great volatility, while values below 20 reflect calmer markets. In August, the VIX was at a multiyear low of 13.45. Six months later, not much has changed. Kass had said we could expect a heavy drop-off any day, does his theory still hold? Consider these charts, an updated version of the ones Kass showed in August. Again, note that when the VIX has hit lows, it was almost always followed by a dropoff in the S&P 500. Today, the S&P is hitting a multi-year highs, while the VIX is at a multi-year low. It looks ominious. Business Section: Investing Ideas If you believe in this chart’s uncanny predictive abilities, you’re probably wondering what you can do to protect your portfolio. With this in mind we ran a screen to see which stocks perform well in times of high volatility, with a high positive correlation to the VIX index. That means if the S&P 500 is highly volatile, the VIX index climbs, and these correlated stocks tend to climb with it. Put another way, this chart suggests the VIX is about to change from a very low value to a higher one. The stocks below tend to rise (increase in share value) along with the VIX value.