Momentum Fades and Valuations Stay Stretched: Protect Before You Add
Hold the Hedged Adds. Momentum is weakening and stocks remain expensive, but the market has not broken down far enough to call a full retreat.
November 1, 2026 at 6:01 PM EST
Justification
Momentum is weakening and stocks remain expensive, but the market has not broken down far enough to call a full retreat. RSI, a momentum gauge, sits at 40.2 — soft but not yet oversold. Stock valuations are higher than roughly 74 out of every 100 months since 2006. The 10-year Treasury yield fell to 4.98%, easing pressure on borrowing costs. With the VIX, Wall Street's fear gauge, at 19.4 and options still cheap, buy protective puts on any long positions you want to keep.
Since the Last Issue
- Fear & Greed Index fell from 26 to 26 — flat since the prior issue, but the VIX dropped from 20.1 to 19.4, pulling options cost just below the key 20 level
- S&P 500 slipped from 7,603 to 7,580, extending the pullback from the year's high to 3.0%
📡 Today's Opportunity Radar: XOP · XLU · URA. Full ideas in the Opportunity Radar section below.
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