Markets pull back fearing the second COVID-19 wave

Markets are pulling back a little bit after a nice run yesterday. There’s a lot of chop that keeps taking out traders left and right at the moment. That’s why it’s paying to play the extremes of the ranges rather than jumping in prematurely.

Still, the VIX hasn’t climbed back above $30 yet, which is a positive sign. Interestingly, gold got hit with stocks today. That’s pretty unusual. It makes me think that funds are pretty levered to both gold and stocks at the moment, so when sellings starts, it will take out both.

Crude oil continues is run, though as I said yesterday, it’s probably starting to run into some resistance.

Markets can trade in a pretty wide range and still be completely normal. While I believe they’re overvalued and in danger of a massive correction again, that hasn’t materialized. We’ll need another catalyst to trigger that sort of selling pressure.

I’m not seeing a lot of opportunity this morning, but hopefully that opens up later today.