386 Days Above The 200 Day Moving Average

The record for consecutive new highs to start a year has been tied in the Nasdaq and the S&P 500 as stocks rallied again on Tuesday. As you can see from the chart below, the S&P 500 is in the 2nd longest streak where it has been above its 200 day moving average. Going back to 1957, this bull market has the top two records as the previous one ended in 2014 at 475 days. Going almost a record period without a 5% correction makes it almost impossible for the S&P 500 to fall below its 200 day moving average. This recent rally has caused the CNN fear and greed index to reach 76 out of 100 which is a signal of extreme greed. It got above 90 in the rally in the fall of 2017.

A Bitcoin Top Signal?

In other speculative news, Jamie Dimon, the CEO of JP Morgan, came out saying he regrets calling bitcoin a fraud because he believes in the blockchain technology. This is a common opinion on Wall Street, but it’s a big deal anecdotally because a big bear has sort of been broken because of the price action. Even though Jamie Dimon isn’t bullish on bitcoin prices, the fact that they rallied added to the pressure for him to clarify his position. Bears being heavily criticized shows how excessive speculation has become. Although the cryptocurrencies have sold off in the past few days, their total market cap is still $748 billion which is higher than it was a few weeks ago. With bitcoin at $14,800, it still hasn’t broken the all-time high it made in December.

Global Volatility Is Also Low

Keeping in tune with the American markets, which had the VIX remain at a 9 handle on Tuesday, global equities also have had a great run. As you can see in the chart on the left, the global equity realized volatility is below 7% which is about as low as it has been since 1987. The chart on the right shows that the MSCI all country world index has had a realized volatility below 7% for 98 straight days. The previous record was 100 days in 1994. There’s no reason to think it won’t be broken as emerging markets continue to push economic growth higher.

Print Friendly, PDF & Email