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Clearly the market is ripping without that “capitulation moment” that everyone was looking for and I am getting a number of emails asking me why I turned bullish this past weekend (after being bearish since the year began) without that surge in fear.  Toro’s Running of the Bulls has a superb analysis on why the VIX doesn’t always need to spike in order for a market to bottom:

I keep hearing and reading that the market will not bottom until there is maximum fear and capitulation selling.  This is a commonly held view by many investors.  But is it true?

No it is not necessarily.  Bottoms can be marked by capitulation selling but bottoms are as likely, if not more so, to be marked by selling exhaustion.

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