A silly catch phrase associated with trading and Wall Street goes like this, "when the VIX is low it's time to go."
So now with the VIX hitting a decade low, does that mean it's time to go? (Sell stocks)
Just yesterday I had written an article and posted it here on Steemit where I had said specifically that the set up for the stock market is higher, and here today as I am writing this article the stock market is indeed higher-with the Dow Jones industrial average up 82 points.
So what's going on here?
The dynamics in play right now are supportive of the risk on trade.
Despite market volatility at a decade low, the market realizes that the Federal Reserve is still running the show, and will support the market at any cost regardless of how extreme distortions across the spectrum of asset classes becomes.
From a technical/dynamic standpoint, we are seeing a stabilizing dollar, some stabilization in crude oil, and some stabilization in the bond market however, we cannot ignore the flattening yield curve (something which is a bad omen and a very strong predictor of future economic activity).
Summary: in my view the stock market will continue to hit new record highs in the short term, and that my Lions means opportunity for us!
Gregory Mannarino
