As I stressed in Friday’s video (worth watching), while we’re open to the notion that a new bull market is in the near-term offing, it’s still not our base case, per the general conditions backdrop and the technical indicators I continue to illustrate.
Another interesting setup I’ve been eyeballing as I work through my weekly exercises is the relationship between the VIX (tracks the pricing of implied volatility in SP500 options contracts) and SP500 price action itself.
The green line in the top panel below is the VIX’s spot price, the rest are 1-month to 8-month VIX futures prices. The bottom panel is the SP500’s price action over the past year:
I.e., we’re approaching some interesting, and perhaps precarious, territory…
Stay tuned…
Asian equities were red overnight, with 13 of the 16 markets we track closing lower.
Europe’s suffering as well so far this morning, with 15 of the 19 bourses we follow trading down as I type.
US stocks are down to start the session: Dow by 179 points (0.52%), SP500 down 0.72%, SP500 Equal Weight down 0.80%, Nasdaq 100 down 0.71%, Nasdaq Comp down 0.74%, Russell 2000 down 0.80%.
The VIX sits at 21.96, up 7.12%.
Oil futures are down 0.81%, gold’s down 0.35%, silver’s down 1.41%, copper futures are down 0.64% and the ag complex (DBA) is down 0.70%.
The 10-year treasury is up (yield down) and the dollar is up 0.01%.
Among our 36 core positions (excluding options hedges, cash and short-term bond ETF), 6 — Vietnam equities, Mexico Equities, Amazon, our emerging mkts ETF, long and intermediate-term treasury bonds — are in the green so far this morning. The losers are being led lower by Dutch Bros, Albemarle, Apple, Disney and energy stocks.
“…the more energy you put into trying to control your ideas and what you think about, the more your ideas end up controlling you.”
–Taleb, Nassim Nicholas. Antifragile
Have a great day!
Marty