The volatility index is up some 20% over the past week. So what should investors expect -- and what can they do to ride out the storm? Craig Callahan, founder and president of ICON Advisers, joined "Squawk on the Street" to talk about the "hidden rally."
Callahan told CNBC's Erin Burnett that his firm measures the market as 22% below fair value. One standout sector might prove to be the financial firms: pointing to the bank-dumping panic during the 1989-1990 savings and loan crisis, Callahan said axiomatically that too many investors tend to "throw out the baby with the bathwater" -- and are currently doing just that. He declared that there are still some "outstanding" financial firms with no taint from the subprime lending mess -- and such firms are selling "very cheap."