A bare minimum correction of 3% in the S&P 500 ETF (SPY) is still nearly two percent beneath today's closing price. More pressing, fear as evidenced by the VIX has only just begun to show any indication that what goes up, will invariably go down. Today's closing bump of about 7% in the VIX and absolute levels that are still sub 15% is far from helping the bull case and pointing at the current pullback in the broader market, as a decent entry point for investors. I'd be more intrigued in a SPY purchase once a correction has grown to a minimum of 5%. A decline of that size tests the former highs, a couple retracement levels since the October low and should coincide with relative, if not absolute fear levels making a guest appearance on Wall Street.
Comment:
A subsequent and brief pop above 15% in the VIX this week and what amounted to a a very modest, relative fear reading has nonetheless helped propel the broader market to new highs....at least the Dow, S&P 500 and Nasdaq on the back of a handful of large, tech stocks. For 'other' investors the potential good news has been larger corrections and affordable hedges for making adjustments