Despite the Tuesday rally, chart analysts warn the sell-off isn’t over
Stocks on Tuesday again attempted to claw back some of their losses from the U.S.-Iran war. Some chart analysts think there’s more downside ahead, however. Equities got a jolt after a report said President Donald Trump was open to ending U.S. involvement in the conflict in the Middle East — even if the Strait of Hormuz wasn’t reopened. Still, Wolfe Research said that markets will be biased to the downside unless the conflict ends and the Strait of Hormuz reopens or there is a major sell-off event that marks a bottom. “While the price action over the past several days has suggested investors are slowly edging closer to capitulation, as the VIX index once again spiked above 30, our sense is that stocks are likely to slowly grind lower in the face of headline risks to either direction,” wrote strategist Chris Senyek. The Cboe Volatility Index (VIX) hit a high of 31.52 on Monday. It traded around 28 on Tuesday. .VIX mountain 2026-02-27 .VIX month-to-date chart. BTIG also pointed out that a pattern in the markets has been a rally to start the week, just for it to fade by Thursday or Friday. In fact, chief market technician Jonathan Krinsky said that Thursday and Friday have been down days for the last six weeks — while Monday has been green for nine out of the last 10 weeks. Additionally, Krinsky noted out that semiconductors — which have been market leaders in recent years —have come under recent pressure . That’s good news, as it’s something that usually needs to happen for market corrections to end, he said. But, just because we’re closer to the end than the beginning doesn’t mean the sell-off is already over, he added. .SPX mountain 2026-01-28 .SPX since its 52-week closing high chart. “The bad news is there is usually another leg lower when everything gets sold at the same time, and that creates the final bottom,” Krinsky wrote. “We don’t think we are there yet.” — CNBC’s Fred Imbert & Michael Bloom contributed reporting
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