With more and more liquidity pouring into markets, there is also more and more hype. People are increasingly tempted to enter markets as prices move higher and risk-seeking is also increasing. We can see this from the VIX (the CBOE’s volatilityindex of the S&P 500) that has dropped from its high in March 2020.
Technically speaking, the VIX has dropped and kept creating lower highs and lower lows. On the other hand, the jump that happened at the end of February 2020 has not closed yet. The gap is still open, so there is a high likelihood for stock indices to climb if the VIX does close this gap.
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