When markets get nervous, many investors do the same thing. They go to cash.
But historically, periods of market fear often create some of the best trading opportunities — if you know where to look.
In a recent Market on Close segment, Barchart’s Senior Market Strategist John Rowland, CMT, explained how rising volatility can signal shifts in leadership across sectors — and how traders can identify opportunities even while broader sentiment turns cautious.
The Signs of Fear Are Already Showing
Several widely watched indicators recently flashed warning signs.
The CBOE Volatility Index ($VIX) pushed above 20 for multiple sessions — a level that often reflects growing anxiety among investors.
At the same time, the CNN Fear & Greed Index dropped toward its most fearful reading of the year.
When these indicators spike, many investors instinctively move to the sidelines.
But professional traders often start asking: Where is money actually flowing?
Some Sectors Are Thriving Despite the Fear
Looking across major market sectors, a few areas have quietly been outperforming.
- Energy stocks are up roughly 21% over the past three months
- Materials have climbed around 17%
- Consumer staples — a classic defensive sector — have gained roughly 11.5%
These sectors tend to attract capital when investors start rotating away from high-growth risk assets. But John highlighted another area worth watching closely: Healthcare.
A Closer Look Inside Healthcare
While the healthcare sector overall has only posted modest gains recently, certain subsectors are showing stronger momentum.
Using Barchart’s sector tools and weighted alpha rankings, Rowland pointed to areas such as:
- Medical services
- Medical devices
- Dental supply companies
- Large-cap pharmaceutical names
These groups often attract attention during periods of market uncertainty.
For example, Cardinal Health (CAH) has been a notable position for The Big Short investor Michael Burry, while Moderna (MRNA) has shown signs of stabilizing after its post-pandemic decline.
But the name that particularly caught John’s attention was Johnson & Johnson (JNJ).
Why Johnson & Johnson Matters in Nervous Markets
Johnson & Johnson has long been viewed as a defensive safe-haven stock.
When markets become uncertain, portfolio managers who must remain invested often rotate capital into companies with:
- Stable earnings
- Global diversification
- Defensive demand
Healthcare giants like Johnson & Johnson often fit that profile.
Historically, when defensive leaders begin outperforming, it can signal that investors are reducing risk exposure and preparing for potential market consolidation or correction. In other words, watching these stocks may offer clues about broader market sentiment.
Fear Often Creates Opportunity
Periods of elevated volatility can feel uncomfortable, but they also reveal important information about where capital is moving.
Instead of simply reacting to fear, traders can watch:
- Sector rotation
- Defensive leadership
- Relative strength within subsectors
Those signals often reveal opportunities before the broader market narrative catches up.
Watch this clip to see John break down the sectors:
Stream the full Market on Close episode for more market insights >>
On the date of publication, Barchart Insights did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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