The SKEW inflated to 127, but that is nowhere near extreme levels. The Put/Call ratios are at very low levels, suggesting that a top is likely forming in the markets. Until the P/C ratio trends higher, the stock market can still rally.
The VIX has been increasing lately, as I highlighted in previous entries on Dec 27 and Dec 28. I mentioned that the increase was not a detriment to the market, but if the trend continues, it will be. With the VIX around 14, anymore increases could be the start of a spiking situation.
We are still in a bullish period of the year - you would not know it though - which gives this market a chance to rally back in the next two days. Therefore, I rolled the Dec30 SPX 2245/2235 put spread out to Jan6 for a 40 cent credit. This puts the total credit at $1.10 for that spread. I will try to close this on Tuesday or Wednesday on a strong up move.
As the SPX 2260/2255 puts expired on the money on Friday, I will also look to recover those losses by trading that same spread if things look to get more bullish.
In any case, on any strength we will sell call spreads as this market is looking to roll over soon.
