It's worth noting the highly unusual $VIX action in yesterday's session.
The $VIX ended up over 9%, while all the majors also ending up over 1%?
Yesterday afternoon: I was busy getting caught up on some charting, and tweeted an alert (seen below):
DOW, NASDAQ, and $SPX, all up over 1%, on a $VIX that's up nearly 9%? That's odd
— Veteran Market Timer (@3Xtraders) December 12, 2022
Last week: I heard that, investors are buying tech calls, but that would actually bring the $VIX down, so I'm really not sure what to make of yesterday's $VIX action, other than protection being put on, ahead of the close of 4th quarter window dressing season, and it may have something to do with a scheduled re-balancing, or sector rotation...?
I would venture to guess that protection is being put on in the energy sector, but to be honest, I'm stumped. Energy did end up 2.5%, but it's such a small segment of the market, I wouldn't think options - in that sector alone - would move the $VIX so much.
Regardless.... The $VIX remains contained, and the trend in equities remains up.
The market remains rather slow ahead of the Fed, and then we have Friday OPEX, which comes early this month, and leads into more light volume holiday trading. This is prime time for manipulation, so minus a last minute shakeout on a scary FOMC announcement, or another bad inflation number, the market should just continue higher.
Don't fight the trend,
AA
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