Bloomberg reports that stock volatility is dropping toward levels that could further encourage U.S. equity bulls even as warnings about complacency continue to hang over the rally from March’s lows.

The Cboe Volatility Index, a measure of implied equity swings, is now one-third the level reached at the height of the Covid-19 market uncertainty. A move lower would be a bullish sign for U.S. stocks, according to Evercore ISI. But Mizuho Bank Ltd. says it’s also possible investors don’t fully appreciate the chances of sharp swings in markets awash with stimulus.

The VIX, or “fear gauge” as it’s often called, closed Monday at 27.9, higher than its lifetime average of 19.4 but well below a peak in mid-March above 82. A fall to 26 would be “huge for risk and a break below that level will unlock the door to 3,500 on the S&P,” Evercore technical strategist Rich Ross wrote in a note.

The S&P 500 is on a five-day winning streak and closed 1.6% higher Monday just below 3,180.