S&P 500 price action simply set a record that is new close just as before now resting at the 3,526-mark. Shares be seemingly they have been in melt-up mode as the S&P 500 and Nasdaq rise relentlessly. Investor risk appetite might are fueled of late by overall manufacturing that is solid data released this morning. Though the atypical relationship that is positive by the S&P 500 Index and VIX ‘fear-gauge’ throughout the previous few trading sessions stands out as a bit odd.
In the midst of stocks striking fresh all-time highs, nevertheless, one explanation that is feasible the lockstep move between S&P 500 cost action therefore the VIX could be increasing investor need for downside protection as they hedge against growing bubble-like conditions. Additionally, as traders turn their calendars to September and venture out of the summer doldrums, it is worth mentioning how VIX that is typical seasonality to an upcoming timeframe of elevated market volatility.
Chart of VIX Index Seasonality by Month
Comparing average VIX Index readings on a basis that is month-by-month September and October have two of the relatively highest measurements. This regular pull that is magnetic has historically steered the VIX ‘fear-gauge’ higher and shares lower during this time period around for the 12 months could potentially weigh adversely on market belief. Having said that, word that the Trump management is moving to prohibit evictions through December could assist the trend that is bullish S&P 500 Index price action
That said, searching to your DailyFX Economic Calendar highlights the release of nonfarm payrolls being fully a risk that is high-impact in the horizon that is instant. Monthly NFP data due this Friday that is coming 04 at 13:30 GMT could consider significantly on appetite for risk and catalyze volatility in the event that jobs report differs materially from forecast. S&P 500 price action simply set a record that is new close just as before.