Election rally lifts stocks, but stretched valuations say buy cheap protection now
Establish Protective Positions. Stocks rallied hard today, but the setup still calls for protection.
November 4, 2026 at 6:00 PM EST
Justification
Stocks rallied hard today, but the setup still calls for protection. Valuations sit higher than roughly 74 out of every 100 months since 2006, leaving little room for disappointment. The VIX, Wall Street's fear gauge, is at 16.6 — below its one-year average of 18.1 — which makes protective put options relatively cheap right now. With the 10-year Treasury yield still near 4.95%, buy protective puts on broad index exposure before the next catalyst tests these stretched prices.
Since the Last Issue
- Fear & Greed Index moved from 28 to 27 since the prior issue, staying in Fear territory despite today's broad rally
- VIX fell from 17.5 to 16.6 since the prior issue, making options cheaper and reinforcing the case for buying puts
📡 Today's Opportunity Radar: ITB · XRT · KRE. Full ideas in the Opportunity Radar section below.
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