VIX Up & Stocks Up As 3rd Hindenburg Omen Appears

While stocks clung to overnight ramp gains, tensions were clear under the surface. Managers sought protection as spot VIX trended higher (closing over 16%); JPY crosses were not buying into (or supporting) the equity bounce (off the S&P's 50DMA), credit markets remained unimpressed, Treasuries closed practically unchanged (30Y was worst +2bps), gold and silver were bid, and another Hindenburg was spotted. The previous two "clusters" of Hindenburg Omens produced meaningful corrections in the US equity market (albeit dips that were rapidly bought). While ominous in its wording, the features that cause an Omen are all about market confusion with highs, lows, advancers, decliners, and momentum all signaling opposing (and mixed) views. With this week's FOMC meeting likely to resolve in significant volatility one way or the other, it is perhaps not surprising that the 3rd H.O. has just been spotted.

S&P futures tested perfectly to their 50DMA overnight (making the biggest 4-day high to low drop in 5 months) before bouncing back handsomely…