The S&P 500 rose nearly 2% last week and the VIX eased a little more than a percentage point to finish at its lowest level in a month, a little below 17.5%, notes the research team at BBH. 

Key Quotes

“Investors drew cautious ahead of the weekend, as tensions over Syria were running high.  The technical indicators are aligned for additional gains, and the five-day moving average is poised to cross above the 20-day for the first time since March 21.”

“Although we are not convinced yet of its veracity, some see a possible head and shoulder bottom with a neckline a little below 2675.  The  S&P 500 reached 2680 before the weekend but reversed and proceeded to take out the previous day’s low (~2654) before settling a bit higher 2656).  The 2678 area corresponds to a 50% retracement of the last leg down that began in the middle of March near 2802.   A move much below the 2635 area now might be seen as a failure and reinforcing the upper end of the new trading range.”

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