Earlier this week in a morning note we disseminate to trading clients, our market technician David Chojnacki pointed out that the SPX (S&P 500 Index) has near term support at the 1220 and the 1208 level. In Wednesday’s session, the 1220 level in the SPX did not hold well, and the ultimate high of the day in the index was around 1225.

We did however hold near 1208, with a low of 1209.47. It is also worth pointing out that the SPX is now below its 50 day moving average (currently 1226.24) and we have mentioned repeatedly in recaps since late October the failure of the SPX to surge through its 200 day moving average and trade above this level with any conviction or sustainability.

Nonetheless, on the bull side of the tape, many will point to unimpressive and average at best, overall trading volumes in the marketplace during this latest sell-off, as well as a rather benign environment in the VIX (CBOE Volatility Index).

Despite selling off three of the past four sessions in the SPX, the VIX remains only a shade above its 200 day moving average, and yesterday closed at $26.04. The index itself was as high as $30.91 (with the SPX trading much higher) just last Thursday, and it was trading in the mid $30s about 3 weeks prior.

In short, the recent equity sell-off has been met with a yawn in essence by most options players whom in the past have rushed for portfolio protection and have bid protective puts higher, thus prompting surges in the VIX.

With all of this said, there is still quite a bit of talk about the possibility of a year-end rally, and there are a handful of leveraged long ETFs that may appeal to those whom want to be on this side of the trade.

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