4 Charts to Show the Blahs Are Back

CBOE Volatility Index (VIX) futures have that Old Contango Feeling again, and S&P 500 Index (SPX) stocks are starting to climb back atop their 200-day MAs

Oct 29, 2015 at 9:18 AM
facebook twitter linkedin

Time to party like it's… a few months ago! Either that or it's time to take another gander at a few charts and random data points we've monitored a bit since the August-September volatility extravaganza. 

CBOE Volatility Index (VIX) futures have that Old Contango Feeling again: 



If that chart looks like the VIX term structure from [pick a date, almost any date in the last six years], that's because it does look like it always looks. The slope's the same as on Aug. 19, just before the market started getting plowed, but the absolute levels are a bit different: 



We're more or less a point higher all across the board. To me, it's more the after-effect of the VIX pop than any sort of "smart" prediction about the actual VIX future. Remember, futures tend to lag a bit in their mean-reversion "responsibilities." They do a better job telling us what already happened than what's going to happen next.

CNN's Fear and Greed is now… greedy!




My favorite driver is Stock Price Breadth. Back a couple of months ago, the McClellan Volume Summation Index was the trendy indicator pointing us to certain doom. Now? Not so much. 

During the last month, approximately 4.67% more of each day's volume has traded in advancing issues than in declining issues, pushing this indicator towards the upper end of its range for the last two years. 

For what it's worth, the market volatility component has only dropped back to "Neutral." Greed levels overall are back to mid-spring readings. 

And finally, our percentage of S&P 500 Index (SPX) stocks above their 200-day moving average (MA):



Nice move off the lows, but still damage here in the individual names. We're at 45% vs. 55% before the August swoon. It's likely a tough comp, as many 200-day MAs are still sloping up. 

Anecdotally, we don't have one of those overpublicized stories right now; no Greece or China or Volkswagen, relative indifference to the possibility that the Fed might raise rates someday, et. al. I'm sure some Biggest Story Ever will crop up again, but for now we're inundated more with FanDuel ads than hyper-concerns. 

All in all, internals are better and the Blahs are back… but this time, I'm not going to complain about it. 

Disclaimer: Mr. Warner's opinions expressed above do not necessarily represent the views of Schaeffer's Investment Research.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1