Fundstrat Tom Lee suggest a “Structural Low” Based on VIX

Lindsay Talbot

Apr 17 • General discussion

In Tom's latest April update, he shares the following:

Market May Have Bottomed ("Structural Low")Tom Lee believes the market hit a structural low around April 7th based on VIX levels, panic selling, and historical patterns. He sees potential for near-term upside to S&P 5,500.
VIX Signals Rebound Is Likely: The VIX spiked above 60 during peak panic (rare), then dropped below key levels like 37.56 and 31, historically indicating the worst is behind us.
Macro Backdrop Still Uncertain: Powell's comments on Fed patience and the unpredictable impact of tariffs have created short-term volatility. However, yields falling after Powell’s speech suggest markets are stabilizing.
Tariff Concerns Are Lingering: While the tariff war with China is a major overhang, signs of diplomatic engagement (e.g., productive talks with Mexico, Japan, Italy, and possibly China) are encouraging.
Resilient Economy, But With Risks: The U.S. economy remains solid, especially in services and small business asset quality, though sectors like tourism and international travel are weakening.
High-Yield Bonds and Recession Odds Improving: Junk bonds have rallied (a bullish signal), and betting markets have reduced the odds of a U.S. recession from 68% to 53% in the past week.
Nvidia ($NVDA) Hit by Tariff Crossfire – But Undervalued: NVDA dropped due to U.S. export restrictions on H20 chips to China. Despite the $10B+ revenue impact, the stock trades below peer valuations and may offer a buy-the-dip opportunity.
Tesla ($TSLA) Is "Washed Out" Pre-Earnings: Despite negative sentiment around Elon Musk and soft demand, TSLA has rebounded from its April low of $214 to $240. Historically, it has surprised to the upside during earnings.
MicroStrategy ($MSTR) Showing Relative Strength: As a levered Bitcoin play, MSTR held up better than the broader market during recent panic selling. It formed a higher low on April 8th, signaling potential accumulation.
Granny Shots Strategy Focuses on Durable Themes: The ETF invests in stocks aligned with structural trends (e.g., AI, cybersecurity, energy) that appear in multiple themes. Current top-performing themes include cybersecurity (e.g., Palantir, CrowdStrike) and energy.