VIX Taps 30-Month Low

8:00am (EST)

Lost in the hoopla of the Dow’s record close above 20,000 on Wednesday was the fact volatility slipped to a 2 1/2-year low. The fresh all-time highs certainly peaked Main Street’s interest along with waiters and Uber drivers across the country as the hoopla now hits another gear. Higher highs certainly appear to be on the horizon as investors start to chase the hottest stocks but the astute market players, like you and I, are still finding stocks that have yet to participate in the rally.

The Dow zoomed 155 points, or 0.8%, to end at 20,068. The blue-chips opened at 19,994 and easily cleared upper resistance at 19,900-20,000 while reaching a lifetime high of 20,082. The close above the latter gets my near-term fluff targets of 20,200-20,350 in play. Rising support is at 19,900-19,800 with backup help at 19,700-19,600.

The S&P 500 sizzled 18 points, or 0.8%, to finish at 2,298. The index also made a steady run throughout the session to an all-time high of 2,299.55. The bulls just missed clearing resistance and my lower fluff target of 2,300-2,325 by a half-point. Support has moved up to 2,280-2,275 with 2,260-2,250 serving backup.

The Nasdaq climbed double-nickels, or 1%, to settle at 5,656. Tech made a steady run to 5,658 ahead of the closing bell and easily cleared my near-term targets of 5,625-5,650. The close above the latter gets 5,700-5,750 in play. I have talked about a possible run at Nasdaq 6,000 over the past few years and I will be reviewing my homework from back then, next Monday. Not too hard to believe, but my charts from February 2015 and 2016 were spot on. Short-term support has moved up 5,600-5,575 followed by 5,550-5,525.

The Russell 2000 advanced 13 points, or 1%, to close at 1,382. The small-caps also showed strong gains but fell shy of its lifetime high of 1,392 after reaching 1,383 ahead of the final bell. I highlighted short-term resistance at 1,385-1,400 and the bulls will need the Russell to follow through this week or next to ensure a group effort. Support is at 1,370-1,365 followed by 1,345-1,340.

The S&P 500 Volatility Index ($VIX, 10.81, down 0.26) traded to a fresh 52-week low of 10.52 on Wednesday to close below lower support at 11.50-11. This gets 10 and single-digits into play and something I said would madden Wall Street. Resistance is at 12-12.50 with a move above 13.50 a warning sign down the road.

I have updated the parameters of our latest trade, VIAV, along with multiple adjustments to our current GDOT (+77%) and TSEM (+69) call option trades to start locking-in these juicy profits.

From desk to press, futures look like this: Dow (+55); S&P 500 (+4); Nasdaq 100 (+17).



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