The market is grappling with a historic breadth problem, as evidenced by the S&P 500's ninth consecutive day of negative breadth, a phenomenon not seen since the late 1990s. Despite a positive report from Broadcom that sparked a rally in equity futures, the broader market remains under pressure due to this ongoing issue. The divergence between the S&P 500 and the equal-weighted SPW index underscores the uneven market performance, with the latter down 2.62% this month compared to the S&P's 0.31% gain. Implied volatility remains low, reflecting market confidence and dealer activities like being long gamma, which suppress large market movements. However, the steep contango in the VIX curve suggests that the market is bracing for potential volatility spikes, especially with the upcoming Fed announcement.
The ProShares Short VIX Short Term Futures ETF (SVXY) rose 0.83% to $53.77 as of 07:40 AM on Friday, December 13.