War on the Way?

"It's War" declares Matt Drudge following an English report about an Indian EDITORIAL. Yes, an editorial just might start WWW3 if people continue to read the headlines. I mentioned the possibility of the markets pricing in a major war a few weeks ago here, but I didn't think it would happen a week later.

Volatility Charts

Fortune favors the bulls as the rally continues.

More stocks are getting bullish and the volatility is dropping.

Stocks above the 50dma are increasing, but we don't have a confirmed trend.

There are an increasing number of stocks making all time highs, but it's still meager.

The spread between short and long term volatility is normalizing, but it may indicate complacency.

Risks are still high, but a proverbial toe in the water won't drown bullish speculators if they play the right sectors. Staples, Telecoms and Heath Care aren't moving, but Basic Materials and Energy are flying high. The bond market continues to exhibit a flight to quality, so remain cautious.