The NDX had a terrible Thursday, although it was off its lows by the end of the day.
It was the VIX that gave an interesting clue though…
The SPX also had a bad day, at one point, SPX threatened to be down 2%. In the end the index closed down JUST under 1%.
At the same time, the VIX futures got whacked.
We can see the VIX futures movement through their ETP proxy VXX.
Take a look at the chart below
The top chart is a 2 day chart of SPY.
The bottom chart is a 3 day chart of VXX.
Over the last 2 days SPY is down about 5 bucks.
Over that same period of time…
…VXX is down!
Unexpected, given the way we know VIX normally operates.
So what gives?
I want you to notice that XLI, the industrial ETF was GREEN on Thursday…
The DJX was leading, the NDX was trailing.
So what does that have to do with VIX you might ask?
While there was some net selling on Thursday, the fact that there were big sectors that were green shows me one thing:
Money isn’t scared of the whole market…
…money is scared of the NDX…
At one point ALL 100 stocks in the Nasdaq 100 (the NDX/QQQ) were down.
Yet, the Dow Jones actually went green for a bit yesterday.
There could be more woes ahead for the mega cap stocks, but money WANTS to be put to use…
It is simply finding new places to work.
We could have several more days of this before the whole market gets solid footing for its next run.
The VIX light is Yellow, but almost red, meaning I think the VIX could drop.
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