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<> A wicked spike in volatility puts two big bullish trends at risk

Published: June 30, 2015 6:14 a.m. ET

The stock market sleeps no more.

After six months of range-bound sidestepping, the likes of which hasn’t been seen since 2007, the S&P 500 on Monday made like a plaster plate at a Greek wedding. With it, the volatility gauge exploded to the upside by 35%, its biggest jump in two years, Bloomberg reported.

That just means that investors are using protection. Much like dads have been advising for years. Not just here in the States, either. Hedges against volatility are piling up from Asia to Europe, amid fears that yesterday’s retreat was more than just slight chop that will soon pass like all the others.

Buying this dip feels more unnerving than recent opportunities, and it’s not just because the leap second is taking aim at everything we hold dear (see “the call”).

Separately, as we prepare to bid farewell to the first quarter, there are a couple of notable streaks at risk. For one, Dana Lyons points out that if stocks don’t hammer out a convincing rebound, this’ll be the first time since 1939 that the first half of year three in the presidential cycle ended in the red.

That generally doesn’t bode well.
Insert>(OH NO says POTUS)

“The numbers are what they are,” he said. “If the Dow Jones Industrial Average can muster a +1.3% gain tomorrow, the historical odds favor better performance for the index over the next two-to-six quarters. If the DJIA cannot muster such a gain, it may have its work cut out for it.”

More and charts http://www.marketwatch.com/story/a-wicked-spike-in-volatility-puts-two-big-bullish-trends-at-risk-2015-06-30?siteid=rss&rss=1