{"id":19940,"date":"2022-07-25T07:30:32","date_gmt":"2022-07-25T11:30:32","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=19940"},"modified":"2022-07-25T07:30:32","modified_gmt":"2022-07-25T11:30:32","slug":"a-bad-omen-for-the-rest-of-2022","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/a-bad-omen-for-the-rest-of-2022\/","title":{"rendered":"A Bad Omen for the Rest of 2022"},"content":{"rendered":"

We just got our second Volatility Index (VIX) sell signal of the year.<\/p>\n

Sell signals occur when the VIX closes below its lower Bollinger Band, and then closes back inside the bands.<\/p>\n

That happened on Friday.<\/p>\n

We went two and a half years without a sell signal. Now, we have our second one in four months.<\/p>\n

And that’s a bad sign for the rest of 2022…<\/p>\n

You see, unlike VIX buy signals – which play out immediately and tend to last a few weeks – VIX sell signals usually play out over the course of a few months.<\/p>\n

For example, back in 2018 and 2019 the one sell signal we got each year led to an immediate 100-point decline in the S&P 500.<\/p>\n

That was about a 2% drop – which is no big deal, especially in today’s environment. Following that move, the market bounced back and made new highs.<\/p>\n

The real damage from the 2018 and 2019 sell signals came about three months later. <\/p>\n

That’s when investors were hit with a 16% loss in December 2018, and a 29% decline in March 2020.<\/p>\n

The sell signal we got this year in late March<\/a>, played out a little differently…<\/p>\n\n\n\n
\n

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 stock market actually managed to rally for a couple of weeks after the signal triggered. <\/p>\n

Then, the selling started and the S&P 500 lost 20% over the next two months.<\/p>\n

As I mentioned, on Friday we got another sell signal.<\/p>\n

Take a look at this VIX chart…<\/p>\n

\"\"<\/p>\n

(Click here to expand image)<\/a><\/p>\n

There’s no way to know for sure how this signal will play out.<\/p>\n

Maybe stocks will rally for a couple of weeks like they did in March before they get hit with selling pressure. <\/p>\n

Maybe the market will fall modestly right away, and then bounce again before the real damage happens a few months later (like in 2018 and 2019).<\/p>\n

Or maybe we’ll see something totally different this time.<\/p>\n

No matter the case, VIX sell signals tend to do a lot of damage to stock prices.<\/p>\n

Keep that in mind – especially if stocks rally following the Federal Open Market Committee (FOMC) announcement on Wednesday.<\/p>\n

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

<\/p>\n

Jeff Clark<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

What’s your prediction for how this sell signal will play out?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com.<\/p>\n","protected":false},"excerpt":{"rendered":"

These sell signals tend to do a lot of damage to stock prices…<\/p>\n","protected":false},"author":25,"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-19940","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\/19940","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\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=19940"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19940\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=19940"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=19940"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=19940"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=19940"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=19940"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=19940"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=19940"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}