It’s the middle of the night, everyone else is asleep, and you’re staring at a screen with glowing crimson numbers. A pain gnaws at your psyche as the market moves against you, leaving you unsure whether the fundamentals have shifted or if it’s just a temporary blip.
Just as you begin to grasp the price action, it abruptly reverses direction. Now, everything on the screen is green. The rapid recovery does little to alleviate the confusion. Such moments of doubt and isolation challenge even the most experienced traders.
After the second-largest overnight percentage spike in the VIX—a massive 65 percent increase—we’ve now seen the largest volatility crash in history, with the VIX index plummeting 62 percent over the last 9 trading days. Has the bull market resumed, or is a retest of the lows still ahead?
Of the fifteen S&P 500 selloffs since 1978 where the initial decline exceeded 10 percent, thirteen
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