I'm Here For You (not)
Another one for the road
Posting this update before dinner so I can get organized for another early flight tomorrow morning. The wife’s college reunion weekend. I’ll do my best to keep up with the action, but it’s so ugly that you may just want to sit this one out.
The VIX Mix took another punch in the face today. For the record, our gauge has collapsed from 85% down to just 16% in a mere 8 trading days.
Our purple trend line has fallen off a cliff. That 85% day saw 16 of 17 components on the bullish side with only one bearish. Today that count is virtually the opposite, with zero bullish and 16 bearish.
The one chart that continues to confound is the relationship between spot VIX and the VIX futures. It is highly unusual to see spot VIX above the front of the curve and even more so with only a week to expiration of the June contract. One of these is not right we need to figure out which one blinks first. Spot VIX coming down would be bullish for risk assets. The June contract rising up to meet an elevated spot VIX would signal a very bad day for equity markets.
The worst of the selling continues to be concentrated in large cap growth, but none of the factor squares were safe today.
Only four of eleven S&P 500 sectors managed to notch gains today and the losers outweighed them. We also had another day where new highs outnumbered new lows.
Is this gonna blow over or will it blow up? The crosscurrents make it hard to call. Monday and Tuesday looked like things might stabilize only to have the rug pulled today. Just be careful out there.
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