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US Stock market rallies after the March lows but there is a warning sign

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US Stock market

US Stock Markets, as is the case with every other stock market around the world, have gone down considerably due to the Coronavirus because all the businesses have gone down due to the pandemic. This meant that the investors were either selling off their stocks or buying stocks which they thought were going to pick momentum causing an imbalance in the market. However, it looks like things have stabilized a touch because the US stock markets have rallied back to touch upon the levels before the March period where it went down considerably.

But there is a danger sign even though the US stock markets have jumped back and it should worry everyone. This warning sign is the VIX level which is still very high as was seen during the lockdown and COVID period. The VIX levels high telling you that something is wrong and we believe it is the fear among investors due to the increasing number of cases of COVID in the US. As of last week, the US recorded a single-day increase of 50,000+ cases of the virus which is the highest so far of any country in 24 hours.

The VIX which is a  volatility index is the level of risk and fear in the stock market and also called the fear gauge among investors and marketers. This is not a metric that should be taken lightly and even though we see markets rising, we should not ignore the VIX levels. Having said that, the VIX which was below 83 during mid-March due to the Coronavirus has come down to just 28 as of last week. While it is a significant drop, it is still very high compared to normal levels and this is the reason why people are keeping an eye on VIX levels to see what trend it shows.

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