Chart of the Day - Friday, April 12, 2024

🏆 Today’s Chart of the Day was shared by Ian McMillan (@the_chart_life).

• The S&P 500 had its worst week since the Oct'23 low, falling -1.56%. However, it's barely off record highs, down only -2.5% on a closing basis.

• Meanwhile, the Volatility Index ($VIX) surged +16% today to a five-month high. Ian points out that it's reached a potential infection point.

• Since the bull market began in Oct. '22, the $VIX has trended lower, making a series of lower highs, while the S&P 500 has trended higher, making a series of higher lows. If the $VIX breaks out with a higher high, it would raise the possibility of a lower low in the S&P 500.

The takeaway: The Volatility Index ($VIX) is at a potential inflection point after spiking +16% this week. A breakout would increase downside risk for the S&P 500, while a rejection would suggest a near-term low.