Momentum investing, or buying stocks with the largest six-month and one-year price gains, works well when volatility is low, with the VIX below 25. But when the VIX closes above 25, all bets are off. This is when mean reversion kicks in, and the sectors and asset classes that have performed the worst tend to turn into the market leaders.

What would that shift mean today? It would mean: Go long energy, long small caps, and short momentum-driven tech stocks (YELP, TSLA, FB, NFLX, TWTR), while trimming healthcare and scaling into retail.

The simplest play would be to buy energy stocks and small-cap stocks (or the Russell ETF), and short momentum tech stocks or the QQQ’s.