Many characteristics of a market bottom were displayed today. Highest volume day of the year, VIX fear index breaking higher, and bonds all moving higher at the same time. First lets take a look at the S&P 500 ETF (SPY). This index traded the highest volume of the year. Notice the high volume today.
The VIX index, also known as the fear index, rises when puts are purchased to protect portfolios. As seen below this index rose 35% today. Not quite as high as last years market correction, but still high. I look at this index as a contrarian indicator.
Bonds moved higher yet again as investors move into a safe haven regardless of the low yielding return. Below is a chart of the bond ETF (TLT) breaking higher for the year.
Bottom Line: Just because these are the signals I look for in potential market bottoms, does not necessarily mean we are there yet. But as always, there will be some stocks beaten down for little reason other than the overall market moving lower. Thanks for stopping by.
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