Looking at SPX, there are two large gaps (red arrows) and one of which was filled by the Friday rally. These kinds of large gaps typically get filled at some point from a technical standpoint so the current rally might fulfill that.

I will be looking at SPX 4,016 level closely as that is where the second large gap is. If that second gap gets filled I will look to initiate some hedging positions expecting the market to start declining again. I will also look closely at the market internals and the VIX indicators. Will scale more hedging positions depending on what these indicators show.

Looking at the various VIX indicators, the VVIX level is way too low considering the current market condition. All the other VIX-related indicators are still way too high. So likely the market rally won’t last that long.

What do you think? How long is this market rally going to continue?