We are deep into the complacency of the summer after SPX broke out to new highs in July. For the last three days the SKEW has risen, and is now well above 130 as the market continues to make new highs. The short-term volatility indicator (VXST) also buried its head below 9 a few days ago, and has since been rising. These are cautionary tells for the bulls.
That said, most all technical indicators are bullish so the SPX may continue higher - even up to the 2200 level - before we get a wave of selling. At the same time, a short term retest of the 2135 area could occur if selling does pick up.
The second half of August can provide a volatility spike and a nice set up for the rest of the year. Now is the time to watch for the volatility spikes and sharp turns in market sentiment.
