VIX Chart

Something is about to happen

Complacency is the adjective I would use to describe the current state of the markets. With the exception of GLD and SLV the markets feel less paranoid than they should, less afraid. Maybe there’s reason to be optimisitic, apparently the ECB has things back under control atleast in the credit markets. But there’s a few charts which are telling me, watch out…

Take the VIX which is sitting at nearly 1 year lows. Doesn’t it seem like something is going to happen which will motivate some insurance buying? Take Syria, Greece, the US debt politics, Iran, corporate earnings, etc. There’s a fair amount of risk still in front of us. Straddles might be the order of the day, or VIX futures?

VIX Chart

Look at the SPY and depending on your timeframe, some pullback here can only be healthy. We’re also sitting at some high range resistance. I wouldn’t be surprised if we bounce off this 135 level on the SPY.

SPY Chart