Even as the stock market has been slowly grinding upwards, the option market has been showing signs of skepticism. As the chart below indicates:
- The market is overbought on RSI-5 and nearing an overbought condition on RSI-14, but...
- The VIX Index, aka the Fear Index, has been rising for the last few days; and
- The VIX term structure has also been indicating higher fear levels in the same time frame.
At the same time, standard measures of overbought/oversold and sentiment models, such as the CNN Money Fear and Greed Index, is showing a high level of greed, which is contrarian bearish.
What's going on? Is this just a sign that the stock market is climbing the proverbial Wall of Worry?
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