Fear has left the markets… for now.
The Volatility Index (or VIX, the market’s “fear gauge”) has fallen to its lowest point since last August. (It’s below 14 for the second time in a week.)
That’s when complacency ruled the markets… right before the VIX spiked to over 40… and the S&P 500 plunged 10%.
Regular Daily readers know we want to be “connoisseurs of extremes” as traders…
An extreme high—or low, like the current VIX—always tends to “revert to the mean.” Think of it like an overstretched rubber band. Its natural tendency is always to snap back.
And there are plenty of potential catalysts for the stock market “snapback” right now…
- Stocks are entering the time of year—the weeks before earnings announcements—where corporations suspend share buybacks. Buybacks have been the S&P 500’s main support of late.
- Many believe oil’s bottomed at $40 per barrel… but Iran and Libya have refused to join an OPEC proposal to freeze production at current levels. That’s bearish for oil prices… and unsettling for equity markets.
- Recent “hawkish” comments out of the Federal Reserve may mean more interest rate hikes in the near run… and further bearish pressure on stocks.
Bottom line: The same issues that spooked investors in January haven’t gone away. Follow Tom’s recommendation for “maximum defense”: stay long cash and gold, and hold select equities and bonds. Review the PBL portfolio right here.
(Advanced traders may want to consider a short position on the S&P 500 with the VIX back at “complacent” levels.)
|
Recommended Links A Strategy That Pays Double Your Social Security Benefits
The average person collects $1,180 per month in Social Security benefits. One company recently uncovered a strategy that pays double that… and potentially much, much more. Like David Williams, who used this strategy to collect $6,560 in a day… and Wesley McCrea, who skyrocketed his monthly income to over $5,000 using a twist on this strategy. Click here to see how to supersize your income with the click of a button in the next 60 seconds.
How to Make $1,300 in the Next 4 Days
A new investing system we just launched could help deliver the chance at a two- or three-digit gain for you in the next four days. And there’s still time for you to get in on it. Even if you start now with a small sum, you could end up with $800 to $1,300 by the end of the week. No special knowledge or skills required. Details here. |
