- The VIX is slightly higher on the session even as equities jump on Monday.
- The price has bounced off a key support area as equities stall at higher levels.
Fundamental backdrop
Equities have bounced higher after the Independence day break on Friday and over the weekend. Once again the markets are choosing to look at the positives rather than the rising number of coronavirus cases in the US. Today's US ISM non-manufacturing purchasing managers’ index (PMI) pushed higher to 57.1 in June from 45.4 in May. Once again the tech sector is outperforming and industry bellwether Amazon topped the $3K mark for the first time.
In terms of the S&P 500, Freeport McMoran is the top performer rising around 10.17% on Monday. The company may need to shift its tactics due to the COVID-19 pandemic. They also stated the new operations come as the company says that it expects to see higher copper and gold production in the second quarter. The bottom of the leaderboard is dominated by energy firms as travel restrictions remain in place in the US.
VIX daily chart
The chart below shows the VIX price bouncing off the 200 day Simple Moving Average to great effect. The VIX price had been heading lower at the start of the session as the risk sentiment seemed to be positive. The key level in the index remains at 23.5 and a break to the downside could mean a return to more "normal" levels.
The Relative Strength Index is holding below the 50 area which means we could still see a fall. The MACD is also looking depressed as it is in the red and the signal lines are still below the zero line.
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