Santa Rally brought us straight up to resistance levels. With today’s news on the European Downgrade out of S&P the market is feeling nervousness again. The slow no volume melt up over the past weeks made people comfortable running positions they don’t actually feel comfortable with. The Volatility collapse has attracted way too much dumb money chasing long only ideas. This “strange” market is feeling more and more like the market we experienced in 2008. We just need a big bank failure, and we are back to where it all started. Lehman moment imminent?
Chart comparison with 2008 below, or is this time different?
SPX and Vix
Some more simple charts click here.