The majority of the past three episodes focused on all of the positive developments I was seeing in markets. Last week, mixed in with all of the positives were a few early signs of a market that was starting to get out over its skis. And for this week’s episode, I spent half the time exploring what’s on this growing list of concerns and the other half reviewing what continues to be healthy about this market. This “on the one hand…” dynamic is a sign of the market’s evolution.
Topics this week, in no particular order:
- Plunging correlations between the VIX, VVIX, and VIX futures
- The accelerating outperformance of the Nasdaq relative to the Russell 2000
- Healthy capital rotation and leadership changes among mega-cap stocks
- Persistent “overvixing” despite the S&P at new highs
- “Market up/vol up” action in the Nasdaq
- Increased noise in fixed strike and fixed delta skew measures
While the rally remains strong with the market in general good health, the underlying structural foundation is displaying some early signs of cracks.
Watch the full deep-dive below.
Here we go!
