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

by Adam Warner

Published on Oct 29, 2015 at 9:18 AM

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: 

151029Warner1

 

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: 

151029Warner2

 

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!

 

151029Warner3

 

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):

151029Warner4

 

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.


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