Shh, don’t tell anyone, but I think the recent stock market correction is done.
Since the February 8th bottom, the S&P 500 has gained 5.6%, and is now close to 100 points from its January 26th all-time high. The Dow Jones Industrial Average is once again above 25,000, some 1,200 points above its recent lows.
The Nasdaq Composite index has again topped 7,000 and posted a bigger percentage gain than either the Dow or the S&P from its low. Investors have jumped on board the FAANG stocks again, betting on fast growing companies to weather whatever economic storms are brewing.
And the much-watched CBOE Volatility index (VIX) also reflects growing confidence and calm. The VIX spiked to 37, a multiyear high way above recent lows below 10. Now it sits in the high teens. If stocks keep rising, the VIX will likely continue to slide.
So, why do I think the worst is over?