Cheap Volatility, Pricey Stocks — Energy Leads While Fear Lingers
Keep Adding, Hedged. Momentum is weak and valuations are stretched, so this is not a moment to chase.
October 26, 2026 at 9:03 AM EDT
Justification
Momentum is weak and valuations are stretched, so this is not a moment to chase. RSI, a momentum gauge, sits at 42.1 — well below the neutral midpoint of 50. Stock prices relative to earnings are higher than roughly 75 out of every 100 months since 2006. The VIX, Wall Street's fear gauge, is 19.2 — just below 20, which makes protective put options relatively cheap right now. Buy selectively into energy's strength, and use low-cost puts on broad index exposure as your hedge.
Since the Last Issue
- Fear & Greed Index moved from 21 to 22 since the prior issue — still Extreme Fear territory but fractionally less panicked
- VIX eased from 19.5 to 19.2 since the prior issue, keeping option premiums relatively cheap
📡 Today's Opportunity Radar: XOP · URA · XBI. Full ideas in the Opportunity Radar section below.
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