First the CONTEXT Model for VIX and SPY
According to Capital Context's model, the VIX is still undervalued at these levels
Their SPY Arbitrage Model shows the SPY as being overvalued here, the model is green, the SPY is red.
Now for credit, forget risk assets and sector rotation, take a look at this...
High Yield Credit is selling off hard
HY Credit hasn't moved higher with the SPX all week, in fact it has moved lower, but today's move is truly scary.
High Yield Corp. Credit is doing the same, selling off hard.
It has been selling off ever since the breakout , but today is an extreme move.
Although probably none of us trade credit, it is an excellent leading indicator for equities.
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