{"id":19818,"date":"2022-06-16T07:30:18","date_gmt":"2022-06-16T11:30:18","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=19818"},"modified":"2022-06-16T07:30:18","modified_gmt":"2022-06-16T11:30:18","slug":"this-move-creates-extreme-conditions-and-opportunities","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/this-move-creates-extreme-conditions-and-opportunities\/","title":{"rendered":"This Move Creates Extreme Conditions and Opportunities"},"content":{"rendered":"

The Volatility Index (VIX) just generated a new stock market buy signal.<\/p>\n

This is the fourth buy signal of 2022. And if this one plays out like the previous three, then stocks should be higher in the weeks ahead.<\/p>\n

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

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

Bollinger Bands illustrate the most likely trading range for a stock or an index.<\/p>\n

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

The VIX generates a stock market buy signal when it first closes above its upper Bollinger Band, and then closes back inside the bands.<\/p>\n

That’s happened three previous times this year (blue arrows). Each time led to sharp, oversold bounces in the stock market.<\/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

For example, the buy signal in January kicked off a one-week, 270-point rally in the S&P 500. The index rallied 10% in about three weeks following the early March buy signal.<\/p>\n

And in early May – just before the Federal Open Market Committee (FOMC) meeting – the VIX triggered another buy signal, which sparked another 270-point bounce in the S&P 500.<\/p>\n

Of course, there’s no guarantee that this week’s buy signal will lead to similar results.<\/p>\n

But most technical conditions are extremely oversold. And investor sentiment (a contrary indicator) is about as bearish as it’s been in many years.<\/p>\n

So, it looks like the stock market is at least set up for a strong oversold bounce – if not a more sustainable multi-week rally.<\/p>\n

For traders who were willing to “buy the dip,” these previous buy signals worked out well.<\/p>\n

And it’s likely the current buy signal will work out as well.<\/p>\n

Best regards and good trading,<\/p>\n\n\n
\"signature\"<\/td>\n<\/tr>\n<\/table>\n

Jeff Clark<\/p>\n

<\/p>\n

Reader Mailbag<\/h2>\n

Where do you think the market is heading next?<\/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":"

It\u2019ll likely work for traders who are willing to \u201cbuy the dip\u201d\u2026<\/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-19818","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19818","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=19818"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19818\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=19818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=19818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=19818"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=19818"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=19818"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=19818"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=19818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}