The SPX is now trading and levels we have not seen since mid-2008 and we all know how well the latter half of 2008 turned out. Not predicting or forecasting by any means, just know we have had an amazing run since the lows of October and December.
Yet things have not changed, the economic data released is massaged in a way to let us think the economy is recovering yet any real or imagined gain in prosperity due to this economic recovery is quickly swallowed whole by the great gasoline goblin who has come out to play in the $4 a gallon range. The negative effect of gas prices on gdp is proven, the higher the gas prices, the higher the negative impact on GDP. If one has to allocate more dollars to the tank, they will have less dollars to devote elsewhere (staples, discretionary, etc).
So the market pushes ever high, the VIX is burgeoning in the high teens which is where it traded during the good old days of 2007 and 2008 when every things was "fine".
Keep your stops tight and enjoy the run and always have a few shorts in mind for if/when this market ever decides to correct (or at least revert back to the mean).
Labels: commentary, economics, energy, gas, oil, technical analysis, vix, volatility