sp'daily5
VIX'daily3
Summary
Yesterday saw equities break new historic highs. Today was a mere repeat performance, as 5 of the 6 main indexes I regularly highlight pushed well beyond the twilight zone.
Also like yesterday, there was a clear divergence between equities and the VIX. Whilst few noticed it yesterday, a great many did notice it today.
The VIX is clearly flashing an early warning, and confirming the (obvious) notion that equities are over-extended.
A retrace is due. The irony is that the market could fall a significant 4%, and that would only take us to around the sp'2170s, where the 50dma will be lurking next week. At best, that might equate to VIX 16/17s. Anything above the key 20 threshold looks out of range.
Goodnight from London