Volatility Is Down… But Not Out

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We opened with a huge move to the upside this morning. The market’s liking what it’s hearing right now in terms of cooling off the trade war and Elon Musk leaving D.C. to go back to Tesla (after one hell of an earnings miss yesterday).

The VIX dropped below 30 and stayed there for the first time since early April – more warm, fuzzy feelings for a market that’s been put through the wringer.

But by mid-morning some of the air came out of the tires and the market started to drift lower – still up, but the selling was unmistakable.

Folks, this rally has all the hallmarks of a rip-your-face-off event; it looks a lot like a bear market rally. Correlation? Check. Stubbornly high volatility? Check.

Let’s look under the hood and see what’s really happening here – this is no time to let your guard down…

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