Volatility and SKEW confirm bullish move

The market is bullish again. Now its a matter of how long it will last. The bullishness is outlined well by Urban Camel in his latest blog.

The number of stocks above their 20 day moving average has bottomed and jumped up rapidly. It sis still far from being in overboughy territory.

The volatility term structure is flattening and the short term measures (VXST) are again below longer term measures (VXV). Volatility is still high, so there is plenty of upside to the market if the VIX can start trending lower.


But most importantly the SKEW printed a 120 reading after Friday's close. Although not extremely low and super bullish, this 120 SKEW is a big divergence from the high numbers that had occurred all of January. The SKEW jumped back up to 126 today, but still this is a normal range for a bullish market.

If we can get a couple days of the market moving nowhere, like today, or even pulling back a little, this would be a real gift for us to get long. I look forward to slipping some trades in on Wednesday. A 40 point move on the SPX is about 2%. This would put the market of the range of 1980 to 2000, which should offer resistance for the bulls, at least in the short term.