The market is experiencing a historic breadth problem, with the S&P 500 seeing its ninth consecutive day of negative breadth, a rare occurrence since the late 1990s. Despite a positive report from Broadcom sparking a rally in equity futures, the broader market may not benefit due to this ongoing issue. The divergence between the S&P 500 and the equal-weighted SPW index, which is down 2.62% this month compared to the S&P's 0.31% gain, highlights the uneven market performance often seen during significant market events.
Implied volatility remains low, reflecting market confidence and the impact of dealer activities, such as being long gamma, which helps suppress large market movements. However, the steep contango in the VIX curve indicates that the market is bracing for potential volatility spikes, especially with upcoming events like next week's Fed announcement. As of 07:30 on December 13, the VIX is at 13.41, just above its 52-week low of 13.4, suggesting a cautious market outlook despite the current low volatility environment.