VIX Volatility and SPX S&P 500 5-Minute Charts; SPX at All-Time Record High 3226

The SPX prints a new all-time record high at 3225.65 and new all-time closing high at 3221.22 on Friday, 12/20/19. The Power and Glory of Pope Powell and the Federal Reserve Holy Temple money-printing, that started in September-October, creates a humongous year-end equity rally.

The S&P 500 prints a big gap-up move at the opening bell. At the same time the VIX collapses to 12-ish so it is all systems go for the bulls. Ditto at the 11:30 AM EST high as the European markets closed for the week. The SPX teases the record high and the VIX prints its LOD at 12.04. The bulls have their chests puffed-out.

However, right off the bat, for such a historic gap-up move and new record highs above 3220, the VIX should be an 11-handle and lower. That 12-handle is glaring. Why won't it print an 11-handle? Anyhoo, the session continues merrily along with one money manager after another appearing on television professing that the coast is clear and 2020 will be stock market joy.

An interesting sidebar; no one expects a recession next year. Thus, for the next almost 13 months, the universal consensus on Wall Street is that no one should even think about a recession occurring. You know what happens when everyone is on the same side of the boat.

Saturday, 12/21/19, is the Winter Solstice, the First Day of Winter, the shortest day of the year. Monday, 12/23/19, Hanukkah arrives. Christmas Eve is Tuesday with markets closing early at 1 PM EST. Christmas Day is Wednesday and markets are closed. Thursday is Boxing Day and Kwanza and interestingly, the new moon peaks for the month at 12:13 AM EST directly after Christmas. Stocks are typically weak through the new moon. There are only six trading days remaining in 2019 a record-breaking stock market year. Fed Chairman Powell is in the basement of the Eccles Building printing money like a madman.

The S&P 500 drifts sideways on Friday afternoon but nonetheless prints a big up day gaining 16 points and at record highs. The SPX HOD is tested for the third time at 3 PM EST but the VIX is now way up at 12.40-ish (blue circle). That's weird. The VIX should be an 11-handle. The VIX finishes positive on the day, yes, it is only with a penny of upside but nonetheless, both volatility and stocks moved higher on Friday so one of them is wrong. The SPX and VIX move inversely to each other about 90% of the time.

What does it mean? When the VIX begins trading at 3 AM EST, it needs to start making headway lower and needs to be sporting an 11-handle on Monday. If not, stocks will probably begin selling off. Remember, the market euphoria and complacency is rampant, so there is a large pullback coming. The VIX can provide an early signal of concern. If stocks continue to rally but the VIX is moving higher, stocks will likely roll over and sell off. Bulls need lower volatility to continue the stock market joy. The erratic and unstable market behavior continues. 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.