Omicron fears have taken the S&P 500 (SPY) to the lowest levels since October. Add in the "Inflation Is Not Transitory" message from Fed Chairman Powell and all of a sudden the rally is being questioned. Maybe rightfully so given the valuation extremes. I’ll cover this and more in my commentary below….(Please enjoy this updated version of my weekly commentary published December 1st, 2021 from the POWR Options newsletter).
Given that NASDAQ names are the biggest market caps now, looking at the VXN, or Vixen, can give better insight into the markets. Remember that the VXN is basically the VIX of the NASDAQ 100 stocks.
It saw another dramatic rise and closed above 30. Big question is whether it breaks out to challenge the recent highs near 40 or if some semblance of sanity returns to the markets.