VIX tested Long-term resistance at 14.17 before closing beneath Short-term support/resistance at 12.99. The probe above critical support/resistance may have triggered a probable buy signal in the VIX. The Cycles Model shows a likely surge strength for the VIX through mid-October.

(Bloomberg)  U.S. stocks have been on a tear over the past week. So why has the market’s “fear gauge” barely budged?

The stickiness of the Cboe Volatility Index, which tracks the 30-day implied volatility of the S&P 500 Index based on out-of-the-money options, eerily echoes conditions that prevailed in early 2018.

SPX tops out at a Fibonacci targets on Wednesday

SPX made a new all-time high late Thursday after noon while hitting two Fibonacci targets at 2916.40 in an inverted Cycle high. Both price and time targets have been met. This begs the question, what will the markets do for an encore? The last time the SPX made an inverted high, it had a 10-market-day selloff.  Food for thought.

(CNBC)  U.S. stocks dropped Friday as the United States and Canada put off resolving their trade dispute. Several indexes closed with historic highs for the month of August, as both the Nasdaq Composite and the S&P 500 notched all-time highs this week.

The Dow Jones Industrial average closed down 22 points, with losses in Boeing and Goldman Sachs offsetting gains in Apple and Nike. The S&P 500 rose 0.01 percent while the tech-heavy Nasdaq Composite traded up 0.26 percent.

NDX peaks a day later

NDX challenged its Cycle Top on Thursday, closing the week right on it. This confirms the SPX high and suggests the two indexes may do a conjoined decline.  The Cycles Model suggests that the next several months may bring pain to equities. The period of weak seasonality may be about to begin.   

(BusinessInsider)  Everyone knows major tech indexes are sitting at record-high levels. But under the surface, a dirty little secret lurks.

Last week, the number of stocks in the tech-heavy Nasdaq Composite index trading at one-year lows outnumbered those at one-year highs, according to data compiled by The Leuthold Group.

This is cause for concern.

The bottom line in this chart shows a proprietary indicator maintained by Leuthold that’s designed to identify times when the numbers of new highs and new lows have been simultaneously large. The firm has found over time that when it climbs above a certain level, it signals selling in the Nasdaq.

High Yield Bond Index still up against trendline resistance

The High Yield Bond Index continues to rally beneath the trendline to a marginal new 74% retracement of the February decline.  A sell signal is confirmed beneath Intermediate-term support at 193.19. “Flag” consolidations such as this imply a resumption of the previous trend.

(NASDAQ)   Bankers and investors are gearing up for a string of junk bond sales backing leveraged buyouts next month in a major test for one of the best performing fixed-income markets this year.

Syndicate bankers say some US$25bn-$30bn of new junk-rated bond sales are slated to hit the market in September with some roadshows ready to be announced right after Labor Day.

High-yield bonds have been one of the best performing segments in fixed income so far this year, posting total returns of 1.79%, according to JP Morgan.

UST consolidates above support

The 10-year Treasury Note Index bounced off Short-term support on Thursday at 120.06, remaining above critical support. From here we may see UST rally back toward the Head & Shoulders neckline near 123.00. This rally may be painful for the speculative short sellers in treasuries.

(CNBC)  U.S. government debt prices edged higher on Friday.

The yield on the benchmark 10-year Treasury note was lower at around 2.844 percent while the yield on the 30-year Treasury bondwas in the red at 2.994 percent. Bond yields move inversely to prices.

Friday marks the deadline for a new trade deal to be secured by the U.S., Mexico and Canada. While an agreement has been struck between the States and Mexico to replace the current NAFTA pact, Canada has yet to secure its place.