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The SPY and QQQ both made new all-time highs for the second time in the last three sessions on Thursday, yet both showed candles of indecision. One of the things traders will be looking at going into the weekend will be the divergence between the SPY/QQQ and the VIX. Volatility hasn’t shown much strength this week, but it hasn’t shown weakness either. If the markets gain strength into the weekend, and make new all time highs yet again, we’d like to see a corresponding move down in the VIX.
This year, we’ve already seen a couple of instances where the VIX either stays flat or even moves up as the markets make new highs, and acts as a leading indicator for a subsequent down move in the SPY.