The Worst May Be Over for Markets
Markets are a chaotic mess….
At one point, the Dow Jones and NASDAQ were both down 1,000 points on economic slowdown fears on Monday.
However, according to the Volatility Index, the worst may be over.
For one, the VIX exploded to an unsustainable high of 65.73 earlier today, telling us fear was way out of hand. Two, the VIX is technically stretched on RSI, MACD and Williams’ %R. When that happens, we’ll typically see the VIX pivot lower, which could elevate ravaged markets.
The last time the VIX peaked was in April 2024. It hit a high of 21.36, and was also met with over-extensions on RSI, MACD and Williams’ %R. It then pivoted lower, leading to a sizable rally in the Dow Jones and the NASDAQ. We’re looking for a similar bounce back again this week.
With the VIX at unsustainable highs, consider going long some of the most beaten-down stocks. Or, you can even pick up call options on the major indices with the DIA and the QQQs.
