Bonds, the VIX, and equities are all in the red at the time of this writing. Logic dictates that something has got to give, with a relative lack of fear in the market even as stocks make fresh correction lows two full months removed from recent highs.
President Obama is speaking at a press conference now, and the FOMC Minutes will be released soon as well. I am expecting the market to move with more conviction, using these events as an excuse rather than a catalyst.
Of course, the issue is in which direction we break. Frankly, I am still trading rather lightly inside 12631 with at least 70% cash on hand. I see plenty of traders calling for a crash or a panic washout lower. So, I am still inclined to look for a rally.
On the five-minute SPY look below, note that we have yet another bear flag versus base setup.
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Is there precedence for a 20% correction without a rising VIX? Something is a foot.
interesting question