EXCLUSIVE: When Volatility (VIX) Peaks, Will That Be The Bottom? Watch These Signals, Says Direxion Expert

Forget the Fed speakers and trade headlines – real bottoms are often written in volatility.

In an exclusive interview with Benzinga, Jake Behan, head of Capital Markets at Direxion, said investors seeking to time market turning points amid recession or tariff-driven turmoil should look to key behavioral signals.

"Investors are monitoring for peak volatility (maybe the VIX ~ 40), market liquidity (potential need for Fed easing or activities to create orderly markets), and any news that could be viewed as improving macro data/information," he said.

Read Also: Volatility Gauge Vix Surges To An 8-Month High: ‘More Fear Equals More Opportunity,’ Says Analyst

Tariff Reprieves Show Us The Playbook

The recent short-lived easing in tariffs gave investors a glimpse of how markets might react when fear peaks. According to Behan: "After another round of tariff reprieve this weekend's, brief as it may have been, we have seen Treasuries rally, gold pull back, and the VIX ease lower."

For those watching these defensive pivots, gold-related funds like the Direxion Daily Gold Miners Index Bull 2X Shares NUGT or its inverse bear counterpart, the Direxion Daily Gold Miners Index Bear 2X Shares (ARCA: DUST), can provide amplified exposure to short-term moves driven by flight-to-safety sentiment.

VIX: The Recession Risk Thermometer

While macro indicators like credit spreads or unemployment take time to react, the CBOE Volatility Index (VIX) is a more immediate read on fear. If the VIX jumps close to 40, it could be a sign that panic is peaking and the market may be near a bottom, according to Behan.

As safe-haven flows redirect capital toward Treasuries and away from risk assets, inverse equity ETFs like Direxion's Daily S&P 500 Bear 3X Shares SPXS could offer a high-conviction option for traders anticipating a deeper drawdown.

Bottom-pickers should focus less on policy pronouncements and more on price action and market behavior. As Behan hints, the road to recovery might not be paved with data – it might be marked by exhaustion.

Read Next:

• Volatility Gauge VIX More Than Doubles In 3 Days: Crosses The 45 Mark For 2nd Day, 1st Time Since 2008 Financial Crisis

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