Meta Strategy Trading Portfolio – Probability Map Update.

Breadth Burst and Volatility Crush

Bulls and bears are locked in a struggle near the long-term uptrend, which generates a range of signals and market studies that are often contradictory.

It can go either way from here.

However, as bear markets are rare events, history points to a 75% probability that we see a resumption of the bull market with limited further downside and only a 25% chance that the S&P 500 falls by more than 20% from its February high.

As stocks attempted to form a bottom last week, two specific signals occurred that I think are highly relevant to suss out the most likely short- to medium-term path for stocks.

I go into an in-depth discussion of VIX Futures Term Structure Inversions.