was up over 2%, a small step back from the brink of a bear market, ending the week 16.50% off its 52-week high. But any single-day stock gains in this market are tenuous. The Dow was down for its seventh-consecutive week for the first time since 2001.
For many investors who flooded into stocks since the pandemic as the bull market again seemed to have only one direction, this may be their first time dancing with the bear for an extended period. For Colas, who earlier in his career worked at the former hedge fund of Steve Cohen, SAC Capital, there are a few lessons he learned from those years which "saved a lot of heartache."
But for the moment, Colas said, making a big bet on a single stock as a buy-in-the-dip opportunity isn't the best way to proceed. "The No. 1 rule is lose as little as possible," he said. "That's the goal, because it's not like you're going to kill it, and investing to lose as little as possible ... when we get the turn, you want to have as much money as possible.
In fact, the stock market has only experienced one 36-plus VIX close this year. That was on March 7, and that was a viable entry point for traders because stocks ended up rallying by 11% — before the situation again deteriorated. "Even if you bought that close, you needed to be nimble," Colas said. The VIX is saying that the washout in stocks isn't over yet. "We're dancing in between the rain drops of the storm," he said.
Brink?
Still trying to unload some shares huh?
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Source: CNBC - 🏆 12. / 72 Read more »