The hourly relationship between the Volatility Index (VIX) and S&P 500 (SPX) is acting strange. On the one hand, the SPX has thrust to new recovery highs off of the July low today, yet as we speak the VIX is at 22.12, much higher than it was at the Sept 14 low of 20.85. Huh?
If the SPX is at least 1% higher than it was on 9/14, but the VIX actually is showing more fear than I would have expected (the VIX should be considerably lower), then we need to take note that the "Fear Index" might be telling us that there IS something to fear as the SPX climbs from current levels.
Right now, I consider the behavior of the VIX a warning sign, not an SPX sell signal. However, a climb in the VIX above key near-term resistance at 22.80 technically will begin to indicate that the SPX is getting increasingly risky for holders of long positions.