Yielding to Fear
As mentioned yesterday, the Volatility Index peaked at 33.70 before settling to 30.30. It last reached such levels in March 2008. It indicates that the market is reaching a capitulation stage, the emotional point where investors are surrendering to the markets.
I found a practical description for capitulation on this blogger's site.
Fibonacci lines indicate the VIX will settle at around 20. Markets are going to establish a trend line before potentially moving upwards again. Investors should compile a list of well-valued stocks in the appropriate sectors and should even placing positions in them.