Markets Too Comfortable: Your Summer Game Plan
VIX at 16.73 signals danger ahead. Dr. Alex Koh's 4-move summer strategy for family investors: when to hold, when to wait, and how to prepare for the last dip.
TABLE OF CONTENTS
Analysis of the April 2025 Bear Market Correction
By Dr. Alex Koh | April 21, 2025
"Have we bottomed yet?" - this is the question filling my inbox as the Philadelphia Semiconductor Index (SOX) dropped another 3.48% today, closing at 3,699.07. After seven months of semiconductor sector decline and with the broader market showing signs of capitulation, family investors need clear guidance. In this analysis, I'll tackle this critical question directly, examining the evidence for and against a market bottom, and providing a roadmap for family investors navigating these turbulent waters.
The Bottom-Hunting Context: Where We Stand
For those following my updates since February, you'll recall I began signaling caution when markets were peaking. By early March, my systematic indicators were flashing clear warning signs, prompting my recommendation to de-risk portfolios. That call proved timely as we're now witnessing an accelerated sell-off with the VIX finally showing climactic behavior above 30 - often a prerequisite for any meaningful bottom.
Looking at our TradingView chart, we can see this correction in historical context. The SOX index has experienced several major drawdowns over the past decade, each offering valuable lessons for identifying bottoms:
- The Oil Crash of 2015/16: 26% decline over 8 months before bottoming
- Trade War 1.0 (2018-19): 33% decline over 3 months with high volatility
- COVID-19 pandemic (2020): Sharp 38% decline over just 5 weeks
- Ukraine/Russia conflict and inflation (2022): 45% decline over 10 months
- Current Trade War 2.0: We're currently down approximately 24% from peak
The key question is whether our current situation more closely resembles the quicker corrections like COVID-19 or the extended downturns like the 2022 inflationary period. The evidence I'm seeing suggests we're not at the bottom quite yet - and here's why.
Three Charts That Answer "Have We Bottomed Yet?"
Chart 1: NDX + VIX = Not There Yet
The relationship between the Nasdaq 100 and the VIX provides our first key indicator for bottom detection. With the VIX making a U-turn and breaking above 30 today, history tells us we're likely not at the bottom yet. Looking at the chart, we can see that sustainable bottoms typically form after:
- An initial VIX spike above 30
- A period of elevated VIX (usually 2-3 weeks minimum)
- A gradual VIX decline while prices stabilize
We've only completed step one of this process. The MACD indicator for the SOX index, currently at -139.82, confirms this view. This deeply negative reading shows accelerating downward momentum, not the deceleration we'd expect at a true bottom.
Bottom verdict for Chart 1: No - VIX behavior suggests more volatility ahead
Chart 2: NDX Price Target - Another 1,200 Points to Go
My systematic analysis of NDX price patterns suggests the next major support level sits around 16,629. This represents approximately a 27.5% decline from peak - significant but not outside historical norms during macro-driven corrections.
What's telling is the shape of the decline. True bottoms typically involve:
- Capitulation volume (which we haven't seen yet)
- A slowing pace of decline (our current decline is actually accelerating)
- Failed rallies that create investor exhaustion
The critical Trade War 2.0 catalyst mentioned in the chart hasn't been resolved. With continuing tensions and gold prices rising (a classic fear indicator), my analysis suggests buyers lack conviction to establish a durable bottom at current levels.
Bottom verdict for Chart 2: No - Price action suggests further downside before support
Chart 3: Semiconductor Sector - Closest to Bottoming
Here's the most encouraging sign: The SOX index has finally broken below its 200-week moving average at 3,791.05 after a 7-month bear market. Historically, this breach of the 200-week MA has often marked the final phase of semiconductor corrections.
The weekly SOX chart shows:
- Price now trading at 3,699.07, below the key 3,791.05 technical level
- MA50 & MA200 (50, close, 200, close) at 4,980.62 showing significant deviation
- The sector down over 30% from its all-time high
While I expect further volatility, semiconductor stocks are approaching values that have historically represented excellent long-term entry points for patient family investors.
Bottom verdict for Chart 3: Getting close - Semiconductors showing early bottoming characteristics
Conclusion: Have We Bottomed Yet? No - But We're Getting Closer
To directly answer the question posed at the start of this analysis: No, the market has not bottomed yet. But we're making progress, especially in the semiconductor sector which may lead the eventual recovery.
The evidence from our three charts shows:
- The VIX pattern indicates we're still in the early stages of the bottoming process
- Price targets suggest another 1,200 points of potential downside for the NDX
- Semiconductors are showing the most promising signs of approaching a durable bottom
For family investors, this is actually good news. Market bottoms aren't events - they're processes that take time to develop. This gives us the opportunity to prepare methodically, research thoroughly, and position our portfolios strategically for the next bull market.
Remember what I always emphasize in our BuyTrigger Club: The most wealth is created not by timing the exact bottom, but by systematically accumulating quality names during periods of fear and uncertainty. The current market environment is creating exactly that opportunity - we just need a bit more patience before deploying capital aggressively.
I'll continue monitoring our systematic indicators daily and will alert our community when the bottoming signals align. Until then, stay disciplined, preserve capital, and remember that these challenging markets create the foundation for the next wave of family wealth creation.
Want More Bottom-Hunting Resources?
- Join the BuyTrigger Club for real-time bottom signals and analysis
- Access our Free BuyTrigger Database tracking 15 quality stocks
- Subscribe to our Daily Market Recap for bottom confirmation alerts
Dr. Alex Koh manages Family Investments and BuyTrigger.io, helping young families achieve financial flexibility through systematic investing in quality growth stocks.
Related Posts
SMH Millionaire Breakout Setup: BuyTrigger $251 Opportunity First
SMH semiconductor breakout imminent, but systematic analysis shows $251 BuyTrigger could fire first. Why patience beats FOMO after 13 months of sideways action.