Check The Box!!

VIX Mix better but stay focused

US stocks kinda went sideways yesterday while the headlines were all about gold and silver getting crushed (it’s still up 55% year-to-date). That lack of progress for stocks left us still in the box we’ve been watching for more than a week. Feels a bit like markets are waiting for us to lose interest and then they’ll pop out. We’re obviously closer to the top and most players assume the breakout will take us back to new highs. The surprise move would be to the downside. That would require some combination of a bad CPI print on Friday, negative earnings surprises from a couple of market darlings and a hawkish outlook from the Fed next week.

In the meantime, the VIX Mix climbed another nine points back into the Neutral zone. We still only see one bullish component, but the number of bearish indicators dropped from 12 to 8.

So we’re seeing the volatility complex improving as equity markets have stabilized with the dip being bought. Not yet out of the woods IMO, and that’s why I focused on checking the box.