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We signaled this level on the VIX to our Tier 1 Macro clients on this morning’s 830AM daily macro call. The bullish “Trend” line of support for the VIX ends at 50.52. Any close below that line is very bullish for the US stock market.

Volatility collapsing in the face of accelerating volume (Tuesday’s US volume was +34% higher than Monday’s) and expanding breadth is not only a recipe for a short squeeze, but a rally that bull riders cannot afford to miss.

“Trend” in our macro model is much more important than “Trade” – the intermediate term trumps the immediate term, because that’s where the real money flows are. If this “Trend” line of Volatility breaks, you can be certain that asset allocators are going to dog pile back into American equities. Don’t forget, there is ZERO incentive to be in cash when rates on cash savings are negative (on a real basis).

I just refreshed my model and I’m moving my immediate term resistance line for the SP500 to 926.
KM