“This relatively rare condition of intense stock market fear, combined with a generally calm bond market, has proved to be a powerful combination for ensuing stock market returns,” Paulsen wrote in a note Tuesday.
When the VIX is above the 80th percentile and MOVE is below the 50th percentile, the average annualized S&P 500 price performance has been “remarkable -- at nearly +21% compared to only a little more than +7% the rest of the time,” he said.https://www.bloomberg.com/news/articles/2020-04-08/bond-stock-volatility-gap-is-bullish-equity-signal-for-leuthold
In checking the stock futures, about an hour before the markets open, this morning, it looks like the market is set to build on Monday's gains.
The futures ... https://finviz.com/futures.ashx
Old_Skeet has been a buyer of equites during this downdraft believing that program trading had the markets oversold. It is now nice to see the stock market rebounding since ... as the saying goes ... I caught some falling knives. I'm thinking ... as the 500 Index begins to approach the 2700 to 2800 range things will slow and we will trade off of TTM earnings projected by S&P to be in the $130's. This could take us sideways and in a trading range through summer. Hopefully, though, when fall comes forward earnings will start looking better (possible in the 150's to 160's) and this will set stocks up for a nice fall stock market rally.
Anyway ... this is how I see it.
Take care ... be safe ... and, I wish all "Good Investing."
I am, Old_Skeet@mcmarasco
... Matt you asked for a signal. Jim Paulsen is one I have followed for years. I have found that his thinking has been pretty much on spot. Hope this helps you sort things out. Anyway, his comments confirmed my thinking. By the way ... my fixed income sleeve took a beating much more than I thought it would. With bond valuations being down I have now begun to buy in the fixed income area of my portfolio.