Fear Gauge Above Average, Valuations Stretched — Sell Calls Into the Bounce
Stay Hedged and Adding. Markets are in an uncomfortable middle ground: enough buying to push the S&P 500 up today, but not enough conviction to call the pullback over.
November 3, 2026 at 12:01 PM EST
Justification
Markets are in an uncomfortable middle ground: enough buying to push the S&P 500 up today, but not enough conviction to call the pullback over. The VIX, Wall Street's fear gauge, sits at 20.8 — above its one-year average of 18.1, making options more expensive. Stock valuations are still elevated, with prices higher relative to earnings than in roughly 74 out of every 100 months since 2006. With the VIX above 20, selling covered calls on existing positions is the preferred hedge rather than buying puts.
Since the Last Issue
- Fear & Greed Index fell from 23 to 20 since the prior issue, crossing into Extreme Fear territory
- VIX edged up from 20.8 to 20.9 since the prior issue, holding above its one-year average
📡 Today's Opportunity Radar: SMH · TAN · XBI. Full ideas in the Opportunity Radar section below.
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