Yesterday was the most boring 300-point rally I’ve ever seen.

Stock futures bolted higher Sunday night after Treasury Secretary Steven Mnuchin said something positive about the trade talks between the U.S. and China. S&P 500 futures, for example, rallied 17 points higher on the comments.

The futures remained higher all through the Sunday evening/Monday morning session. By the time the opening bell rang on the NYSE, the S&P 500 gapped 17 points higher. And that’s pretty much where the market stayed all through the trading day yesterday.

There was some additional buying pressure in the final minutes. That helped the S&P close up 20 points. For the most part, though, everything that happened in the stock market yesterday happened late Sunday night. There wasn’t much movement at all during yesterday’s session.

It was a spectacular display of no volatility – which kind of flies in the face of what I wrote yesterday. I’m looking for more volatility this week, not less.

Yesterday’s action – or lack of action – has not changed my opinion. Nor has it changed the look of the daily chart of the Volatility Index (VIX) we posted yesterday.

So, for today, at the risk of burrowing even deeper into the “higher-volatility” bunker, let’s take a look at the 60-minute chart…

Remember, 60-minute charts are shorter-term than daily charts. Patterns on a 60-minute chart tend to play out within just a few days.

As you can see, in this timeframe, the VIX is tracing out a consolidating triangle pattern. And it’s quickly approaching the apex of the triangle. So we’re likely to get a breakout of this pattern soon.

There’s no way to guarantee which direction the breakout will occur. But based on the conditions of the MACD and RSI momentum indicators, the odds favor an upside breakout.

This, of course, mimics the bullish setup in the daily VIX chart I showed you yesterday.

So, while Monday’s action in the market was lethargic, it still looks to me like volatility is poised to pop higher.

Best regards and good trading,

Jeff Clark

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