What I'm Watching: Credit Still Hasn't Confirmed, the VIX Gave Its Signal, and Health Care Hit a High
What I'm Watching · October 25, 2026
Last week's Chart Rooms were all about one question: is this a real recovery or just a bounce inside a rotation? Tech came back Wednesday and Meta delivered after the bell. But the chart I trust most still hasn't signed off. Here are three charts from Tuesday's Chart Room I'm keeping on my screen heading into next week's Fed meeting (October 27–28). These charts are through Tuesday's close, so treat the levels as the map, not the score.
Everything Rallied. Junk Bonds Didn't Move.
HYG closed Tuesday at 76.83, unchanged, on a day when every sector but tech went up. It was sitting under its 20-day (77.12), its 200-day (77.90) and its 50-day (78.06), and only about half a point above the late-September low (76.39).
Wednesday, with tech leading and Meta beating, it rose just 0.2% to 76.98. Still 92 cents under the 200-day.
Hans's take: Credit led on the way down, so credit is what I watch on the way back. A close above 77.90 on HYG says the de-risking is done. Until then, I treat the stock rally as unconfirmed and keep my hedges on.
The VIX Gave Its Buy Signal
This chart has one rule: the buy signal comes when the VIX pushes outside its upper Bollinger Band and then closes back inside it. It spiked to 22.31 on Friday the 16th and closed outside the band. Monday it closed back inside at 18.44. Tuesday it dropped to 17.31, back below its 200-day (18.14), and Wednesday it fell another 3.6% to 16.68.
The signal before this one got run over by a spike, so this one still has to prove itself. But it's the setup this chart is built to catch.
Hans's take: If you bought protection with the VIX at 14 or 15, this crest-and-rollover is a reasonable place to take some of it off. Just don't swing all the way to selling a pile of volatility while credit is still the holdout.
Health Care Led Again, to a New High
XLV rose $4.17 Tuesday to 179.82 and touched 180.06, the highest level on this chart. It had dipped Monday right back to the old August high (175.92), held it, and took off. It closed above its upper Bollinger Band (178.49), the MACD is rising and RSI is near 70.
The moving averages are stacked the right way: 20-day 170.97, 50-day 170.06, 200-day 156.66. Wednesday, when tech took the lead back, health care gave a little (−0.49%). That's normal for a group this stretched.
Hans's take: This is where the defensive money keeps going. It's stretched in the short run, so I'm not chasing it. Let it come back toward 176 before adding.
Put the three together and you get the market in one picture. Fear has come off (the VIX), money is rotating into the defensive leaders (health care), but the lenders haven't bought the story yet (HYG). That's a bounce inside a rotation, not an all-clear.
With the Fed meeting this week, I'm letting the levels do the work: 77.90 on HYG, whether the VIX stays below its 200-day, and 176 on XLV for anyone wanting in on health care.
Want every chart, every night? The full Chart Room, every trade as I take it, and my read on volatility all day are inside Trader63, my pro trading community.
Trade smart, stay hedged. — Hans
This material is for educational and informational purposes only and is not investment advice or a recommendation to buy or sell any security. Options involve risk and are not suitable for all investors. Past performance does not guarantee future results.
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