We are at an interesting time in the markets.
On a longer-term chart of the US Vix, we can see that complacency in the markets is at an interesting point.This particular point where the VIX closed yesterday used to be the high ‘fear point’ a few years back between ’04-’07 when the bull market was in it’s full swing. A print above the 19 level as that point was when fear was at the highest and market would resume it’s bull run after the index moved below this level as can be seen in the oval points in the middle of the chart.
However between ’00 and ’04 and between mid ’07 to today, we can see that the market has been well over the trendline, but far removed from the highs of 80 it touched in ’08.So are we complacent now or are we returning to the ‘fear’ days.
Let’s look at the index chart-SPX
Overhead are 2 important points at 1146-1170 levels.
To summarize, we are calling for a pause at these levels, just noting that VIX is a contrary indicator and should resume it’s upward journey from these levels.The SPX should correct by about 50 points before it resumes it’s journey upwards.
