It is now been 2 weeks since the stock market fell sharp and the CBOE Volatility Index reached panic stage levels...

Shortly after the August 5th selling rout, I had mentioned that it’s important to consider the cup-and-handle formations that had developed in stocks, sectors and themes shortly after the lows were struck last October. 

Staying the course with the longer-term market leaders through short-term volatility has often proven to be the best strategy. The latest of this is the trading action following the August 5 decline. 

From 65 to 18, where it currently stands, the CBOE Volatility Index has had a mighty swing... 

The great American “philosopher” Yogi Berra said it best: “It ain’t over ‘til it’s over.” I think that applies well to the current market condition. 

If history is any guide — and I think that it is relevant — then the selloff on Monday was a climactic one similar to the extreme selloffs that we saw during the Great Financial Crisis, and again amid the initial Covid outbreak. 

Fear may have elevated to panic in yesterday’s session. To put that in perspective, let’s look at the CBOE Volatility Index — sometimes dubbed the “Fear Index” and at times does act as a barometer of outright panic. 

In pre-opening trading this morning, the CBOE Volatility Index has traded as high as the 54 area, and that to me reflects full-on panic. But, the scenario here is not entirely different than October 1987…. 

The CBOE Volatility Index reached a higher high than its recent rally, moving above the 19 level yesterday. This morning… 

Two headline factors may have been largely responsible for yesterday’s market action. For one, the Fed did indicate yesterday that it might cut rates in September…