10 day sector Correlations closed the week at .22 or 6th percentile for the past 15 years, decreasing .08 day over day and .18 week over week.

Now we are basically at where were were exactly a month ago before correlations mean reverted (see pink vs. lightest green dots on chart below).

While volatility has been rising, it has not done so dramatically, and now in the short term (10 trading days) there remains more evidence that we will be higher than lower. The vix bias signal has flipped more more (71 percent of the time VIX is lower given current correlations).

The VIX-VXV spread indicates on two percentile timeframes (6 months and 10 years) that there is a positive upwards bias that is statistically significant.  This among some of the other ratios we track are confirming this positive bias 10 days out.

This tells us that if there pullback early this week it should be considered a dip-buying opportunity as our current data shows, otherwise be biased towards more upside in the short term.  The chart below shows price ranges if things get heated to the downside early this week, 95% of the time price should not trade below $319.88 and 99% of the time it should not trade below $318.36.

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