Howestreet.com - the source for market opinions

ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

June 10, 2019 | Rally Hasn’t Quashed ‘Fear Indicator’

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Although the S&P 500 and the Dow Industrials have been in explosive rallies for the last five days, traders appear skeptical, if not to say skittish. As the take-no-prisoners short squeeze has unfolded, a widely watched ‘fear indicator’ has refused to give ground; this, despite a 700-point burst in the Dow Industrials and a corresponding gain in the S&Ps over the last three days. The VIX Volatility Index settled at 15.94 on Monday, just a dime lower than where it was when the rally started to accelerate toward the end of last week.  Although the first two days of the move had brought the ‘fear indicator’ down somewhat, its failure to budge since then is unusual. Contrarians might argue that this is bullish since it suggests that buyers are holding firepower in reserve. But it’s also possible the VIX has simply got it right and that it has good reason to act worried. Whatever the case, skepticism alone cannot continue to power stocks higher indefinitely. When the last bear has been squeezed bloodless, look out below!

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.

June 10th, 2019

Posted In: Rick's Picks

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site

*
*

This site uses Akismet to reduce spam. Learn how your comment data is processed.