Fear Index Rallies as 'Buy the Dip' Trade Runs out of Steam (VXX)

VIX spiked Wednesday afternoon, gaining over 20%. The rally came as equity markets slumped, with energy leading the pack. With WTI crude down 4.5%, E&P and oil services names were noticeably weaker, but other areas including tech, financial, and biotech were also hit.

Despite the rally in fear, some traders noted that recent dips, including yesterday's fall, have proven to be excellent buying opportunities. Others are decidedly more cautious due to a number of concerns. At the top of the list are fears the Fed will drop their "considerable time" language on rates following last week’s impressive jobs number.

The Dow Jones traded lower by 1.5% heading into the close Wednesday. The S&P and Nasdaq were lower by about 1.6% and 1.7%, respectively.

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