- The VIX trades at 28.6, 4.8% higher on Monday.
- The price has moved up suggesting traders might be expecting some volatility soon.
Fundamental backdrop
The major US bourses are on the rise at the start of the week. The S&P trades 1.45% higher on Monday while the Dow outperforms pushing 2.10% in the black. Despite the stellar performance in risk markets, the VIX has still moved higher. This could be because we are heading into earnings season, today PepsiCo (1.56%) reported their latest numbers and despite a drop in net sales the companies stock trades higher. Positive reports about a potential coronavirus vaccine have also helped the bullish sentiment and Pfizer (5.13%) is also performing well on Monday.
Casino Stocks are also performing well as Macau could be allowed to open up to tourists again and lifted quarantine requirements. Wynn Resources pushed over 12% higher and Las Vagas Sands moved over 6% in the black.
Technical picture
Looking at the chart below, the VIX is still under the psychological 30 mark. The price is heading to the 55 Simple Moving Average and it is often resistance for further moves to the upside. One of the key features is the black trendline under the current price. If the price moves below the zone there is a better chance that the red support line at 24.8 could be tested. The 24.8 level is the top of the consolidation to a more “normal” VIX zone in historical comparison.
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