Short-term tradable bottom? The CBOE Volatility Index has spiked to 29, but more importantly, the VIX curve (the prices of near-term VIX options) is now in backwardation : that is, the prices of near-term contracts (cash and the March options contract) are now higher than options contracts further out (April, May, June). This is unusual and indicates very high levels of short-term fear. In the past, this has been associated with at least a short-term tradable bottom. @VX.1 3M mountain March VIX index contract over the past three months. I say “short-term tradable” because the market fears have now morphed beyond tariffs to include a wider economic slowdown. When these concerns surface, it is very difficult to “call the bottom.” All we can say is that the market moves ahead of any slowdown. In a true economic downturn, there are usually additional legs down in the future as analysts adjust their earnings estimates lower in response to CEO commentary. Whether this is a “true” economic downturn, or the depth of the downturn, is still not clear.