The complacency, fearlessness and total relaxation about the stock market is reflected in the VIX 8-handle. There is no reason to worry about any significant selloff in stocks since the central bankers will always step in and support markets. Thus, global investors continue sipping Fed wine, ECB champagne and BOJ sake while buying stocks without a care in the world.
The full moon peaks for the month at 9:42 PM EST tonight and stocks are typically buoyant moving through the full moon each month. The Santa Claus rally runs from Christmas Eve to two days into the new year. The SPX was at 2683 on Christmas Eve so the bulls need to push price back above 2683 by end of day Wednesday, otherwise, it is an ominous signal for the stock market this year.
Traders are also watching how the first week of January trades since, as the first week of January goes, so goes January and so goes the year. So there are seasonality factors at play to begin the year. New money also comes into markets when a month begins especially a quarter and especially when the year begins.
So VIX 10.96 will tell you the market direction story first thing tomorrow (Tuesday) morning. Watch it closely. The brown bar is the 10.43 level called out by Keybot the Quant algo that is currently on the short side. Bears can still have hope below 10.96 but if the VIX drops below 10.43 the bulls rule and the bears are toast.
Thus, if VIX moves higher the stock market will crumble lower. If VIX drops under 10.96, the bulls will begin rallying the stock market higher. If VIX drops below 10.43, the bears have no hope and the bulls will be ramrodding the stock market far higher. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added Minutes Before Tuesday's Opening Bell: VIX drops to 10.69 so the bulls are slapping the bears around. S&P +12.
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