Market Extra: Wall Street fear threatens a dramatic comeback in the stock market

The days of tranquil, docile markets may be nearing an end. Measures of risk are rearing their heads once again, with the CBOE Volatility Index VIX, -1.22% closing at its highest level of the year in Thursday trade and jumping above its 200-day moving average, now at 13.54, Friday for the first time since December of last year (see chart below):

Source: FactSet

Broadly speaking, moving averages are used by technical strategists to help to judge if short-term and long-term directional momentum in a security is intact. Right now, the VIX, also known as Wall Street’s fear gauge is creeping toward the long-term average, which suggests that it could attempt a firmer breakout, in the parlance of chart watchers.

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