This is the highest level for VIX since the election, and the Dow Jones Industrial Average just broke down below its crucial 50-day moving average:
As we’ve noted several times in the past, the 20-day and 50-day moving averages have continually acted as support for the major U.S. indexes, including the Dow, S&P 500, and Nasdaq 100.
What happens next? Investors will have to wait and see, but it appears that volatility is returning to the markets in this holiday-shortened week. That could spell muted returns for stocks at the very least, and possibly another big sell-off like we saw back in mid-March.
The markets have been stuck in a very tight range since then, and the longer that factor remains in place, the larger the resulting move tends to be.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was trading at $205.83 per share on Tuesday morning, down $0.56 (-0.27%). Year-to-date, DIA has gained 4.21%, versus a 4.83% rise in the benchmark S&P 500 index during the same period.
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