The flush is complete
The VIX has hit a key reversal level at 18.50, triggering a risk-off signal for most stocks. Note that not all stocks participated in this rally continuing to make this is stock picker's market.
In our last update, we warned that the market was in a "liquidation phase" and that we needed to see a violent volatility spike before a structural bottom could form.
Today, the market gave us that signal.
The $VIX Reversal (Volatility Index) attempted to spike higher this morning but was immediately rejected. This "Spike and Fade" pattern is a classic technical signature of Peak Fear.
When $VIX collapses while price rallies, it indicates that institutional hedging is unwinding. The sellers have exhausted their inventory.
Signal: $VIX Reversal Detected
Discretionary Positioning vs. System Signals While our automated models operate on a Daily Timeframe (and thus await the official market close for confirmation), the intraday price action is strong enough to warrant discretionary exposure.
I have personally opened LONG positions in high-quality names to capture the early reversal:
- $AMZN (Amazon)
- $MSFT (Microsoft)
- $META (Meta Platforms)
Our model triggered $NVDA and $AVGO as well yesterday. We saw real strength in the semiconductor stocks.
What to Watch: We expect the official retailtrader.ai daily signals to potentially trigger later this evening if this strength holds into the close.
Strategy: I am positioning early to capture the initial move. If the daily candles close strong, the automated system will likely confirm these entries for the broader portfolio tomorrow.
