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With the Dow Jones Industrial Average, NASDAQ Composite, and S&P 500 all in negative territory for the year, it's no wonder some traders are running for the hills.
At the same time, we have some investors in rose-colored glasses ready to call the market bottom each time we hit a new low. And then we hit a new low. And then we hit a new low…
Starting to see a pattern here?
Remember the Trading Commandment I mentioned? "The trend is your friend… until it isn't."
Well, the trend we're dealing with now is an elevated CBOE Volatility Index – Wednesday marked 51 consecutive days above 15 – and a market on the decline.
I have to admit here that my forecast that stocks could find some kind of bottom when the VIX hit 25 is toast.
Now I'm looking for a VIX above 30, at minimum. I'll tell you why – and what to do about it…
But first, buckle up…
About the Author
Chris Johnson is a quant - he's obsessed with building and perfecting mathematical models that allow him to predict, with startling accuracy, the direction of the markets, entire sectors, and individual securities. For the last year, he's been researching and building a new system that lets him move swiftly in and out of the hottest stocks in the market for life-changing gains - entirely on his own terms. The results of his newly-minted Night Trader system are nothing short of amazing.
Chris also contributes to Money Morning as the Quant Analysis Specialist.