The SPX closed at another all time high on Friday by a few points. Overnight, futures dropped and gave up most of the gains, then recovered and now flat. Also on Friday, volatility as measured by the VIX, dropped by a lot to just above 16. The VIX has not been that low since July 16th.
While this seems very bullish, to me it speaks of complacency in the market. Goldman Sachs came out with their official call of 4700 on the SPX by year end. That’s another 5.9% higher from here. That is a pretty bold call while we enter into a seasonally bearish period period and Covid 2 (Delta) is now impacting communities across the globe.
While most business leaders and politicians are emphatically stating no more lockdowns, fear may grip the population and self imposed lockdowns may take hold. All it will take is a few outbreaks after kids show up at schools across the country. The market has certainly not priced this in. I am waiting patiently, mostly cash and net short for now.
Founder | SimpleOptionStrategies.com
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