{"id":19332,"date":"2022-01-20T07:30:46","date_gmt":"2022-01-20T12:30:46","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=19332"},"modified":"2022-01-20T07:30:46","modified_gmt":"2022-01-20T12:30:46","slug":"the-first-buy-signal-of-the-year","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-first-buy-signal-of-the-year\/","title":{"rendered":"The First Buy Signal of the Year"},"content":{"rendered":"

2022 is starting off as a tough year for investors.<\/p>\n

As of Tuesday, the Dow is down 2.7%… The S&P 500 is down 4%… And the Nasdaq is down more than 7%.<\/p>\n

Conditions have gotten quite oversold. So far, anyone buying into those oversold conditions has suffered from even more selling pressure.<\/p>\n

But, that’s about to change…<\/p>\n

It looks like the Volatility Index (VIX)<\/a> is on the verge of generating its first buy signal of 2022.<\/p>\n

Take a look at this chart of the VIX along with its Bollinger Bands <\/a>…<\/p>\n

\"Chart\"<\/div>\n

The VIX started the year at a rather complacent level below 17.<\/p>\n

As the selling pressure kicked in over the past three weeks, the VIX has exploded above 23. That’s better than a 40% increase in volatility<\/a> to start the year. And, it has pushed the VIX above its upper Bollinger Band.<\/p>\n

Bollinger Bands illustrate the most likely trading range for a stock or an index. Whenever the VIX trades outside of its Bollinger Bands, it indicates an extreme condition that’s likely to reverse. And, those reversals create trading opportunities.<\/p>\n\n\n\n
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Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The VIX closed above its upper Bollinger Band on Tuesday. When it closes back inside the bands, the VIX will generate a new, broad stock market buy signal. That could happen as soon as today…<\/p>\n

VIX buy signals were quite reliable in 2021. Eight out of the 11 buy signals proved to be profitable.<\/p>\n

Traders who bought the S&P 500 on the last buy signal in early December<\/a> saw that index rally nearly 7% over the next three weeks.<\/p>\n

Of course, there’s no guarantee that something similar will happen this time around.<\/p>\n

But given the current oversold conditions, it looks to me like the stock market is setting up for at least a strong oversold bounce.<\/p>\n

And, a VIX buy signal might be the catalyst that gets it started.<\/p>\n

Best regards and good trading,<\/p>\n

\"signature\"<\/p>\n

Jeff Clark<\/p>\n

<\/p>\n

Reader Mailbag<\/h2>\n

Did you buy during the last buy signal? If so, do you think the VIX is a reliable indicator?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Something\u2019s about to change…<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-19332","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19332","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=19332"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19332\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=19332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=19332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=19332"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=19332"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=19332"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=19332"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=19332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}