When will this Trump-fueled bull market approach bubble territory? Watch this indicator

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CBOE Volatility Index أخبار

Stock Markets,Investment Strategy,Business News

Traders and investors alike should watch to see where Wall Street's fear gauge goes next.

Investors questioning if the current postelection rally is on the verge of becoming a bubble should keep an eye on one measure of volatility, according to DataTrek Research. The CBOE Volatility Index , known on Wall Street as the VIX, helps traders track when a market rally is actually unhealthy, said DataTrek co-founder Nicholas Colas.

But he said investors should take pause if the VIX surpasses 20 and stocks continue climbing. To put it succinctly: "Rallies built on an elevated VIX signal a bubble," he wrote. That's a lesson market participants learned, during the dot-com bubble of the mid- to late-1990s, he said. In the current bull market, dating back to the fourth quarter of 2022, however, the VIX has been largely "well behaved," Colas argued.

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When will this Trump-fueled bull market approach bubble territory? Watch this indicatorTraders and investors alike should watch to see where Wall Street's fear gauge goes next.
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