Yesterday’s session was interesting for multiple reasons. Firstly the S&P
configuration: Opening above the previous historic high but slowly eroding intraday from that new top, to end below the previous close in above average volume
. Secondly, the technicals on the index suggest a reversal could be at play from a very high RSI
above 80 (overbought). Thirdly, the VIX
was up more than 21% intraday and 15% at the close. And finally, it seems options on major indexes saw a significant surge in traded volume
yesterday (2x average). Could it be that fear is gripping the market ahead of a potential US budget shutdown? Or will there be a continuation in the current trend after the usual one-day breather? We will need confirmation over the next couple of sessions before we can definitively conclude, but Futures
suggest a rebound today. The main trend remains upwards, and I remain long the market but mindful of a potential correction to come.