The dangers of complacency were abundantly evident in the last hour.
I have remarked all day that the CBOE Volatility Index (VIX) was nearing its lowest level since July of last year. While this is an indication that the levels of fear are clearly dropping, it also indicates--given the real concerns with the economy--that complacency may be a bit too high.
And traders noticed. Big tech momentum names--Apple , Google , RIM, Baidu --all suddenly reversed and ended down on the day. Materials and industrial stocks, which were strong all day, also weakened in the last hour.
Still, there are equity-friendly trends here...new highs at the NYSE reached their highest levels since November...yesterday, retail sales were better than expected, today CPI better than expected.
Now, if the data the rest of the week (think industrial production, out tomorrow) is equity friendly we could see a drift higher--some bulls think all the way through Memorial Day. Bears, of course, note the lack of volume and the move up is due to an absence of sellers then real buyers.
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