Stock Market Week Ahead: Watch for Volatility Spike as S&P 500 Faces Pivotal Point

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USD/JPY News

S&P 500,CBOE Volatility Index

Market Overview Analysis by Michael Kramer covering: USD/JPY, S&P 500, CBOE Volatility Index. Read Michael Kramer's latest article on Investing.com

options expiring on Wednesday. The current VIX option positions suggest that the VIX may remain around the 15 level, which means the reduction in volatility that helped last week won’t be a factor this time.put options that traders rushed to buy back in early August, with monthly OPEX now behind us. If the market rises this week, it will need to do so on its own merits, without the tailwind of options expiration.

Meanwhile, the S&P 500 reached the 78.6% retracement level of the decline from mid-July. If the index is going on to make new highs, then this is the level it needs to break through for that to happen. So, from a Fibonacci perspective , one could argue that the highs seen in July are significant, and the rebound from a Fibonacci standpoint has been a retracement .I’m not saying it’s exactly the same, but it is similar to what happened in the fall of 2018. We saw a sharp sell-off of nearly 12%, followed by a quick rebound of over 8%.

 

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