The VIX doesn’t often lose 35% of its value in 7 trading days and this is one of those rare occasions. A collapse in volatility is not usually followed by large market declines; in fact it tends to be followed by intermediate-term rallies.
If this follows the past, the market will have a short-term pullback (over 35% of the stocks in the S&P 500 have 2-period RSI readings above 90 and the market will likely begin a pullback within the next 1-3 trading days). This pullback will then be followed by a continuation of the bull market.
The reality is any money manager who is not 100% long is under-performing the averages and the pressure is on them to get long as quickly as possible. With so much cash on the sidelines (and being printed!) this bull market could continue for a while.
Today’s Potential Opportunities on Further Pullbacks: