The stock market had a robust run on Tuesday, but investors should be mindful of possible volatility and pain ahead.
The Cboe Volatility Index (VIX) had risen by about 42% from 30 June to Monday as S&P had fallen by 1.6%, a dark day since months ago. The rising Covid-19 cases have spooked investors as the worry of peak growth continued to haunt the market.
If history is a guide, we might see between one to three more weeks of volatility ahead of us, and in most cases, a possible lower stock prices.
S&P 500 is taking a break?
The index had fallen below a critical level which indicates possibly more pain. The index had dropped below the 50-day moving average on Monday. As some point out, this occurred in 6 out of the 7 months this year, usually followed by subsequent pullbacks.
Surprises are everywhere!
The market may warrant more surprises as the contagious Delta variant can unleash a new round of economic damage. Moreover, some analysts believe that the cases may not have peaked and could rise to 100,000 daily cases in the coming weeks based on experience seen in Israel and the UK.
Pika World is ready for a possible dip set up for entry if the pullback is set to continue.
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