VIX Spikes 11%

2/16/2017

8:00am (EST)

Lost in Wednesday's bullish shuffle to higher highs, the VIX went unnoticed by the talking heads as volatility spiked 11% while closing above lowered resistance levels. The damage wasn't major but any fender bender is a cause for concern, especially, when you have money invested in bullish positions. Of course, we have stayed one-step ahead of the slick talking pros and there is no reason to abandon ship, but the action could get choppy with February option expiration on Friday and a three-day weekend approaching.

The Dow added 107 points, or 0.5%, to close at 20,611. The blue-chips slipped 8 points on the open to 20,496 with near-term support at 20,400-20,350 easily holding. The run to 20,620 afterwards set another record high with upper resistance at 20,550-20,600 being cleared. Continued closes above the latter keeps bluer-sky territory to 20,800-21,000 in play.

The S&P 500 soared 11 points, or 0.5%, to end at 2,349. The index tested a low of 2,334 at the start of trading with upper support at 2,325-2,300 standing strong. The bounce to 2,351 ahead of the closing bell was a fresh lifetime high with lower resistance at 2,350-2,375 getting breeched but holding.

The Nasdaq jumped 36 points, or 0.6%, to finish at 5,819. Tech fell a 6-pack on the opening scuffle to 5,776 with rising support at 5,750-5,725 easily holding. The rebound to 5,821 was the index's 7th-straight gain with upper resistance at 5,750-5,800 being cleared. Continued closes above the latter get fresh hurdles at 5,850-5,875 in the mix.

The Russell 2000 climbed 7 points, or 0.6%, to settle at 1,404. The small-caps traded down to 1,392 in the opening minutes with rising support at 1,390-1,385 holding. A close below the latter remains our signal to possibly go short. However, the run to 1,405 afterwards and close above lower resistance at 1,400-1,425 still keeps me bullish.

The S&P 500 Volatility Index ($VIX, 11.97, up 1.23) stayed elevated throughout the session with the high reaching 12.01. The close above lower resistance at 11.50-12.50 needs to be respected with a move above the latter being a bearish development. Support remains at 11-10.50.

I have adjusted a number of Stop Limits and Exit Targets this morning so please take note and make the changes in your brokerage accounts.