![\"CBOE](\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2017\/2017-07-21-vix.png?w=525&ssl=1\" "\\"CBOE")
<\/p>\nThe CBOE Volatility Index (VIX) made a new low of 9.30 indicating record low levels of stock volatility. High levels of stock buybacks and large ETF fund inflows may both have contributed, but this is only the third time in its 27-year history that index has broken below 10%. The first was in late 1993. The second, in late 2006, was followed a year later by a massive market snap-back. This time is no different. Volatility is unlikely to remain at such low levels and eventually we will see a market down-turn, accompanied by high volatility, but there is no crystal ball that can tell us whether this will be in one year or five.<\/p>\n
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Corporate bond spreads are also falling, with the spread between lowest investment grade Baa (10-year) and equivalent Treasury yields at their lowest point since 2008.<\/p>\n
![\"Corporate](\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2017\/2017-07-21-bondspreads.png?w=525&ssl=1\" "\\"Corporate")
<\/p>\n
Source: St Louis Fed & Moody’s<\/p>\n
The yield curve is flattening but remains comfortably above a flat or negative yield curve when
\nthe yield differential (10-year minus 3-month yields) falls below zero. A negative yield curve is a reliable warning of recession within 12 months.<\/p>\n
![\"Yield](\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2017\/2017-07-21-yielddiff.png?w=525&ssl=1\" "\\"Yield")
<\/p>\n
Source: St Louis Fed<\/p>\n
The Freight Transportation Services Index displays a steady increase in economic activity.<\/p>\n
![\"Freight](\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2017\/2017-07-21-freight.png?w=525&ssl=1\" "\\"Freight")
<\/p>\n
Source: St Louis Fed & US Bureau of the Census<\/p>\n
And the S&P 500 continues its advance towards 2500.<\/p>\n
![\"S&P](\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2017\/2017-07-21-spx.png?w=525&ssl=1\" "\\"S&P")
<\/p>\n
Target 2400 + ( 2400 – 2300 )<\/p>\n","protected":false},"excerpt":{"rendered":"
The CBOE Volatility Index (VIX) made a new low of 9.30 indicating record low levels of stock volatility. High levels of stock buybacks and large ETF fund inflows may both have contributed, but this is only the third time in its 27-year history that index has broken below 10%. The first was in late 1993. … <\/p>\n