Stocks close higher after mounting colossal comeback

Yahoo Finance's Jared Blikre recaps the market close after a historic sell-off reversal.

Video transcript

ADAM SHAPIRO: Yeah. So let's get back to Jared Blikre who has a final thought for us. And Jared, there's an interesting article in "Bloomberg" today, which apparently pointed to the VIX and a metric that you can use with the VIX to signal market bottoms and that we might have actually gotten that metric. But what do you want us to consider after what we've just witnessed today?

JARED BLIKRE: I think we need to consider that we are in potentially, not necessarily, but potentially a massive repricing of risk, similar to where we found ourselves in February and March of 2020 at the beginning of COVID. This time around, we have a Fed that has a lot more sway. In fact, it's all kind of surrounding the Fed right now, whereas they didn't have that kind of optionality two years ago, except to throw everything in the kitchen sink at it.

Here is the VIX. You talked about the VIX? Well, this is a huge reversal. And this could be an early step in the right direction here. Let me just put a one-year chart. We can see we've had many big spikes before. Looks like this one is actually taking these out.

But you go back on a two-year basis, and you can see this doesn't even approach the volatility that we saw in the early part of the pandemic. So are we heading back that way? I don't think so. But we need to keep our eyes and ears out because we are seeing a lot of risk-on, risk-off behavior, more risk-off than risk-on.

Here's today's leaders market. Now, retail had a really nice day off of the Kohl's news. That was a bright sector. So XRT is a retail ETF. That's up 6% followed by three for the homebuilders. Ark Components, ARKK ETF fund, that's up over 2.8%. Then you have software, IPOs, internet, regional banks, we have the SOX, that's chip stocks, transports.

So we've seen this screen before. We saw it early on in the year. And it looked like this was going to be a dip buying opportunity. That was not a dip buying opportunity. In fact, there has been several that have just been slammed and taken out. Even dark Dr. Marko Kolanovic over at JPMorgan issued an all-clear, it's time to buy value, probably at the expense of growth. But even that didn't work just yet.

So you want something to buy here? Maybe energy, it's time to start dipping your toes back into that. And if you have some growth stocks on sale that you must buy like Apple, you're always going to be in Apple, well, it's on sale now. But I think we need to wait to see what happens with the FOMC on Wednesday. That's just too big of a wild card right now.