After multiple challenges of Short-term and Intermediate-term resistance, VIX rallied in the final hour on Friday to close above Long-term resistance at 10.98. This action generates a clear buy signal.  A breakout above the Ending Diagonal trendline suggests a complete retracement of the decline from January 2016, and possibly to August 2015.  

(SeekingAlpha) 2017 has been a record year for volatility, or for the lack thereof do be more precise. The VIX hit numerous records this year, such as the most consecutive closes below 10, the lowest intraday move ever, the lowest close ever and so on. With such moves in the VIX it’s safe to say that this was one of the lowest volatility years in decades, if not ever. The VIX’s median in 2017 was around 11, sharply lower than its long-term median of over 18 going back to 1993.

SPX closes at its Cycle Top

SPX saw a further erosion of prior gains this week, closing within 10 ticks of its Cycle Top at 2673.51.  A further decline beneath its Cycle Top suggests the rally is over and profits should be taken. Should it break Intermediate-term support and the trendline at 2583.52, a sell signal may be generated. Should that happen, the decline may continue through the month of January.  

(CNBC)  U.S. stocks closed lower Friday, the last trading day of the year, with no S&P 500 sectors ending higher.

The S&P 500 closed about half a percent lower but still held gains of 19.4 percent for the year, its best since 2013. Information technology soared 36.9 percent and materials gained 21.4 percent as the top performers for 2017, while energy and telecommunications were the only sectors in the red for the year.

Selling suddenly accelerated in the last several minutes heading into Friday’s close. Traders said there was no apparent reason for the broad sell-off, which hit all three major indexes. It took several minutes for stocks to settle before the Dow Jones industrial average finally ended about 118 points lower, erasing gains for the week.

NDX declines beneath Cycle Top resistance

The NDX closed the week beneath Cycle Top resistance at 6484.61 with a loss for the week.  A decline beneath the lower Diagonal trendline at 6320.00 and Intermediate-term support at 6213.59 may produce a sell signal.    

(CNBC)  It’s no secret to market watchers that the Nasdaq has seen a monster year, up nearly 30 percent year to date and on pace for 14 months of nearly uninterrupted gains.

But there’s one more record to add to the books: the technology-heavy index is on pace for its sixth straight positive year, its longest annual string of gains since its six-year streak ended in 1980.

The Nasdaq also has posted a record number of all-time high closes this year.

These highs come as many are concerned with some parallels being drawn between the index’s recent price action and that of the dot-com bubble era. Some see the rally petering out next year.

High Yield Bond Index rally loses momentum

The High Yield Bond Index suffered a sharp reversal on Friday, losing most of its weekly gain. The rally is substantially extended, but a break of the Cycle Top at 190.60 may tell us the rally is over.  A sell signal may be generated with a decline beneath the lower Diagonal trendline at 180.00.

(MarketWatch)  Some big U.S. mutual funds are investing in high-yield securities that overseas regulators warn may not be suitable to retail investors.

The securities at issue are called contingent convertible, or CoCo bonds. A recent Wall Street Journal report said contingent convertible bonds are ending 2017 with near-record low yields, warning that regulators should be vigilant if and when the bonds rally, since the high yields may attract more retail investors.

UST bounces at the neckline

The 10-year Treasury Note Index bounced at the neckline to complete a right shoulder of a potential Head & Shoulders formation. The Cycles Model now suggests a potential rally through mid-January that may be quite strong. Should the rally materialize, the minimum target may be mid-Cycle resistance at 127.23 or higher in a panic situation.