With the VIX approaching a level of 20 – the market feels overly complacent. The S&P 500 is now around 15% off its October low – resembling what we saw in June. My guess is should we see the VIX below 20 – expect the market to reverse shortly thereafter.
Classic Bear Market Rip
Stocks are likely to push higher through to the end of the year. It’s what we usually find after mid-term elections. But for now, this feels like another bear market rally… which will likely find resistance around the zone of 4100 on the S&P 500. We are a long way from any Fed “pause or pivot”…
“Rip Your Face Off Rally“… But What’s Changed?
It’s what you might call a “rip your face off rally”. Short traders are caught on the wrong side and scramble to cover… that’s what happened today as CPI came in slightly lower than expected. But is it reason to be jubilant? Hardly.
More Tricks than Treats?
The market is up around 11% from its recent lows. Its rallying on the hope of a dovish Fed. My advice is tread carefully… you might get ‘tricked’ rather than ‘treated’ this Halloween. The upside does not handily outweigh the downside risks. Bear markets are known to do just that…
For a full list of posts from 2017…