The BPNDX is putting in bullish divergences under the recent price lows. (See Below) I think its only a matter of time until the BPNDX breaks out. Also the VIX while being a poor indicator overall is now breaking down. Consider back in 1995/6 when we were in a similar range bound market with a VIX in the same area....what happened from there? We broke out to the upside from 96 to 2000 with a rise in the VIX. (I'm not expecting that type of move here but rather a 5th wave advance). I think the same is likely to occur here. Time will tell as always. Low volatility in the market-our tight range the past 9 months-often leads to a low VIX....when we break this range I expect the VIX to move higher not lower as it did in 1996. Time will tell as always.
Interesting I dont see many people both here and in the media mentioning the catalyst for this move on Friday..
JP Morgan is notorius for goosing a group right at key levels for max. effect.. Heck, Didnt Greenspan and the gang use that a few times as well? Knowing you have those guaranteed buyers lined up is perfect for a quick hit.. the question now is, will real buyers show up next week? and will people sit on profits confident that we are about to start the next leg up?
One thing is for sure- there is certainly alot of exubberance out there long before Fridays move...
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