The Big Picture: Sep 3, 2021

Stocks are off slightly on the huge jobs miss (+235K versus +800K consensus, +1,053 prior), raising the question of whether even this much bad news can be good news for stocks.In this “heads bulls win, tails bears lose” market, the Fed remains the ultimate arbiter of market direction – based not only on the massive infusions of liquidity and interest rate suppression, but the deliberate and calculated trampling of volatility at critical levels of support/resistance.

Every few months, we roll out this chart which clearly shows the relationship between key breakouts in SPX versus breakdowns in VIX.  Despite many sharp spikes higher, VIX has been threatening to break below the dashed purple trend line for the past three years.

It seems like a good time to take a look at the big picture.

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