ALERT!!!

I haven't done my nightly routine yet, still answering emails when I got an email about the CBOE's SKEW. I looked at it and was shocked, I figured maybe it's a corrupt data feed so I checked it on TOS, the same result. Then to rule out a corrupt feed for the exchanges, I went directly to the CBOE website to confirm and it is confirmed.

 This is my chart, SKEW just hit $139.25 in a +11.6% move today alone!

This is the data directly from the CBOE website.

As you can see, it just surpassed its 52 week high. I'm going to try to find out how high the last high beyond 52 weeks was.

For newer members, here's a brief summary of what the CBOE's SKEW Index is meant to do...

From the CBOE website:

"The CBOE S&P 500 Skew Index (ticker symbol: SKEW), a benchmark measure of the perceived risk of extreme negative moves — often referred to as "tail risk" or a "black swan" event — in U.S. equity markets. "


In other words, SKEW attempts to measure the probability of an improbable event or a black swan/ market crash. For historical reference, the SKEW from 1990-2010 has only been at this level approximately .15% of the time, $115-$117 is where SKEW spends most of its time, so this reading is extremely high and extremely rare. Skew was $135 around the 2007 top.


I will also remind you that the VIX hit a low of $15.23 today showing extreme complacency, the VIX typically trades inversely to the market, low readings often mark tops and high reading mark bottoms. 
The last time the VIX was lower was 7/1/2011 at $15.12, here's what the market looked like...

2 days later, the market started a decline, the S&P lost 18.8% at the August bottom and lost 20.7% to the October low, the Russell lost well over 30%.


Considering the 3C charts, the breadth charts, the Credit/Risk Asset charts and the events that I have expected and have started to unfold as expected, I take this huge climb in the SKEW as a major red flag.


I'll bring you more in the daily wrap...