Traffic Light Change…Here’s Why

The VIX ended the day flat…

The VIX futures were down…

VXX was down….

All of the major indexes were down…

What does this mean?

It means that we are starting to see a change in money flow.

We have seen VIX lows happen NOT when AAPL is off to the races (or the other big 5 names)…

⇒ VIX lows happen when XLI,  XLE, and XLF are rallying. <==  

This is because the OLD economy has been where ALL of the perceived risk is living.

Now that the end might be near and a Vacine MIGHT happen,

we see a rallyin the transpo’s, the industrials, and the banks.

Meanwhile money comes out of the QQQ.

BUT with money leaving 23% of the S&P 500 and into a chunk of the other 77%  what is going to happen to the market?

Nothing if the dollars moving are somewhat dollar neutral within the stock market.

Thus, VIX falls.

I am switching the traffic light to RED.  

I think volatility is going to be moving to a new level revolving around 25 or maybe even lower…

It was hovering around 30.

The VIX Traffic Light is Red.

Your Only Option,

Mark Sebastian

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