THAT'S ALL ?

I rushed home from the East End of Long Island to check out my stocks and my statistics and, yikes, is the Rally over already? It just might me be as the Volatility Sisters cratered over the last two days. The VIX is now sitting about 11% below its 10 day SMA and we know from prior history that the equity markets rarely make northerly progress when the VIX is this oversold.

In addition the SPX now has a 2 day RSI in excess of 90 and that is also a pretty good sell signal indicating the markets are overbought after the rapid move higher that began last Wednesday.

Keep in mind that both these indicators were way past normal levels before they turned. The SPX began its drop from the 1,327 level and hit the "bird flu bottom" on Wednesday at 1245, so that was about a drop of 80 and we have come back up by 35. I suspect the markets have further to go as there are lots of traders who want to short these prices. I will be looking to take some off on any northerly move from these levels.