Russell: “Volatility as expressed by the VIX has been low for many months. The last time the VIX rose above 20 was last October. I get the feeling that this may be the calm before the storm. The latest VIX reading is 13.6 and between now and February I expect to see the VIX move up to around 20 or more.
The first week in January gave us no hint as to what's coming up. Every week that goes by increases the odds for a surge in volatility. If volatility does surge, I don't know if it will result in the market moving up sharply or down sharply. From my own standpoint, I prefer peace of mind and watchful waiting as we prepare for stock market history.
Meanwhile, optimism remains very high. Investor's Intelligence lists bullish advisories at 61.6% -- a five year high, with bearish investors at 15.2%. At the same time there are 6 distribution days on both the S&P and the NASDAQ. With the Industrials and Transports both at recent record highs, the Averages continue to point higher. But caution is still warranted.
Meanwhile, gold creeps quietly higher. If gold hits the 1270 box, it will be a victory for the bulls. Gold tested ...