If there are any bears with enthusiasm left out there they may want to be watching the point from which SPX reached and reversed (a bit) today. The extreme target was 2815 and today’s high is close enough for government work. Minor support is at 2750 and better support is at 2625.
Now, resistance is not a stop sign and this thing could test its highs as several internal sectors are now doing. But anyway, just thought I’d point out the resistance poke and recoil.
This chart shows the air gap that the VIX declined into, with nothing but bullish hot air down here to 11 (“it goes to 11”, sounds like the title of a funny post). It’s a picture of much higher risk (with everyone nice and comfy) than in December (with everyone terrorized). But if VIX is to explore the 11s the thing above would likely get up there for a top-test.
All the while the Atlanta Fed’s GDPNow forecast has cliff dived along with other economic indicators and the Fed folded like a cheap suit. Now add in a triumphant Trump on trade and headlines I saw today in multiple places stating “China Enters a New Bull Market” and well, it’s interesting is all. Risk to go around for everybody is how it seems.
I can almost feel a majority of participants sort of nodding off with the Robo (relief) Rally. Bears have given up hope and bulls are content again. That is how it is supposed to be in a risk environment. It appears that contentment is driven mostly by the Fed and global Central Bank roll over. But that sort of automatic thinking – that all it will take is some happy Trade War news and a friendly Fed – is not healthy. It feels more like hope.
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