Another week, another reason to wonder: Is the correction really over?
The market found its footing this past week, as the Dow Jones Industrial Average advanced 427.38 points, or 1.8%, to 24,360.14, while the Standard & Poor’s 500 index rose 2%, to 2656.30, and the Nasdaq Composite gained 2.8%, to 7106.65.
Dow Closes the Week Up 427 Points–the Hard Way
It was the second time in the past four weeks that the S&P 500 followed a down week with a gain, and it did so despite concerns that President Donald Trump would launch a missile strike against Syrian targets, amid continued chaos in Washington, and after a lackluster response to better-than-expected earnings from JPMorgan Chase (ticker: JPM), Citigroup (C), and Wells Fargo (WFC).
Sure, the recent volatility can’t help but feel stressful, given that it’s nearly twice what it was last year. But a doubling of the VIX doesn’t have to be a harbinger of future pain, according to Cumberland Advisors quantitative strategist Leo Chen. He notes the S&P 500 has returned an average of 6.3% over the six months following a doubling of the VIX. “The VIX certainly has felt feverishly high relative to the market in the past two months,” he explains. “Fortunately, a doubled VIX may not be bad news for the market.”
Read the full article at Barron’s.