The post Stocks and yields signal trouble as VIX approaches key resistance appeared on BitcoinEthereumNews.com.

Rising volatility, declining Treasury yields, and fading equity rebound signal trouble ahead for Nasdaq, S&P 500, and Dow. Overview The Volatility Index (VIX), commonly known as the market’s “fear gauge,” has reached a critical juncture, testing the pivotal 2-year support/resistance level at 18-80. Following a dramatic 40% decline from its recent high of 29-20 to 17-32, the VIX has established a symmetrical triangle pattern, indicative of an imminent breakout. Major U.S. indices, including Nasdaq, S&P 500, Dow futures, and the 10-year Treasury yield, are retreating from recent rebounds, which increasingly resemble a classic “dead cat bounce” rather than a sustainable recovery. The alignment of these indicators suggests the market sentiment remains fragile, raising the probability of further downside momentum. Fundamental context: Yields, stocks, and VIX connection The relationship between U.S. Treasury yields, equity markets, and the VIX is traditionally inverse but occasionally synchronized during uncertain times. Rising yields typically pressure equity valuations by increasing borrowing costs and offering attractive bond alternatives. Conversely, falling yields normally signal economic caution or recession fears, prompting investors to sell equities and seek safer assets. The VIX rises as uncertainty and volatility escalate. Currently, the unusual synchronization, where yields and stock indices are simultaneously pulling back after brief recoveries, reflects heightened uncertainty about the economic outlook, inflation trajectory, and Federal Reserve policy direction. With the VIX stabilizing at a crucial technical juncture, this synchronization points to investor anxiety resurfacing, hinting at the bearish continuation of stocks and possible yield declines. Technical breakdown Volatility index (VIX) The VIX is testing critical resistance at 18-80 after rebounding from the 17-30 zone. A symmetrical triangle pattern has formed, signalling potential volatility expansion. Immediate bullish scenario: Holding above 18-80 targets an initial rise toward 21-25 (triangle midpoint). A break above this level significantly increases the odds of a climb…

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Filed under: News - @ March 28, 2025 2:26 pm