The broad stock market is on the verge of a buy signal.

I know… nobody wants to buy stocks right now. The market is behaving poorly. Investor sentiment is horribly bearish. And almost all of the financial television talking heads are talking bearish.

But, those are the conditions that often lead to at least a short-term bounce.

We also have the possibility of a CBOE Volatility Index (VIX) buy signal over the next day or two.

Longtime readers know the VIX generates a broad stock market buy signal when it closes above its upper Bollinger Band and then closes back inside the bands. 

Here’s a chart showing the previous VIX buy signals in 2018…

The blue circles show the VIX buy signals. There have been seven of them so far in 2018. Here’s how the S&P 500 has responded following each one…

The VIX buy signals didn’t always mark an intermediate-term market low – which led to a rally that lasted several weeks. But, it pretty much always marked a short-term low in the broad stock market.

In every case – and this is the important point to note – the S&P 500 was higher one month after a VIX buy signal.

The VIX closed above its upper Bollinger Band on Monday. When it closes back inside the bands, it will trigger its eighth buy signal of 2018. All seven of the previous buy signals were profitable one month later. I expect the next buy signal will be profitable as well.

I’ve been buying stocks this week in anticipation of a VIX buy signal. And I’ll aggressively add to those positions once we get the signal.

Most traders should probably look to be buying stocks here as well.

Best regards and good trading,

Jeff Clark

P.S. Techniques like these are what I use to find trading opportunities every single day. And over the years, I’ve sent my best ideas to my dedicated readers…

My goal is to deliver the best trading strategies you can use to make money no matter what a stock does – whether it goes up, down, or stays the same. And with the market changing character this past year, you need to prepare for what lies ahead.

If you want to learn to start making money in any market environment, read on here.

Reader Mailbag

In today’s mailbag, a Delta Report subscriber shares their thoughts on Jeff’s Mastermind…

Jeff, I really liked your first Mastermind session. I learned a lot and look forward to more sessions.

– Andrea

Thank you, as always, for your thoughtful insights. We look forward to reading them every day. Keep them coming right here.