While the Nasdaq 100 Index (NDX) is busy making new all-time highs, so is the NDX:VXN ratio (VXN is the Nasdaq 100 Volatility Index), as shown on the following two Monthly charts.
What is different about these two, is that the NDX:VXN ratio has run up against major resistance (the top of its long-term uptrending channel, while the NDX has a long way to go before it does the same.
With reference to the ratio chart, a drop and hold below the 460 level (127.2% external Fibonacci retracement level) could forecast a drop down to, potentially, major support at 380 (100% Fib retracement level plus bottom of long-term channel) on this chart, or lower.
However, inasmuch as the Momentum indicator has reached a new all-time high, such a scenario may be doubtful in the near term...but could be signs of an imminent parabolic spike in NDX, followed by a blow-off drop coming sometime in the not-too-distant future.
I still think that if the markets sense that Congress is not going to deliver on any meaningful tax reform and economic stimulus packages this year, or even into next year, while the Fed is busy raising interest rates, they will lose patience and transfer funds from equities into bonds, and, possibly, into Gold, particularly if retail sales, new jobs, and higher wages don't pick up.
But, as long as the Fed has the market's back, I think any blow-off drop may be wishful thinking for some, and could end up being a short-seller's nightmare, if it doesn't materialize.
And, as I've mentioned here and here recently, Bonds, Technology, and volatility are key to the success of any new (sustainable) bull market in equities, in general, that may seem to be evolving, in my opinion.
Welcome and thank you for visiting!
The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.
DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...
UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Mon. May 28 ~ U.S. markets closed for Memorial Day Holiday
* Wed. May 30 @ 2:00 pm ET ~ Beige Book Report
* Fri. June 1 @ 8:30 am ET ~ Employment Data
* Tues. June 12 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Wed. June 13 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
* Tues. July 3 ~ U.S. markets close early at 1:00 pm ET
* Wed. July 4 ~ U.S. markets closed for Independence Day Holiday
* Thurs. July 5 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Wed. Aug. 1 @ 2:00 pm ET ~ FOMC Announcement
* Mon. Sept. 3 ~ U.S. markets closed for Labour Day Holiday
*** Click here for link to Economic Calendars for all upcoming events
IMPORTANT BLOG POST UPDATES...
* JCPOA - Will President Trump recertify the JCPOA on May 12?...stay tuned...May 8 the answer is "No"...US pariticipation in the deal
is scrapped...new sanctions coming for Iran and, possibly, for nations supporting Iran.