What's going on?

So what is going on with the market. One only needs to look at the VIX index see. The VIX index is:

The Chicago Board Options Exchange SPX Volatility Index that reflects a market estimate of future volatility, based on the weighted average of the implied volatilities for a wide range of strikes. 1st & 2nd month expirations are used until 8 days from expiration, then the 2nd and 3rd are used.

In simple terms, it shows the volatility of the S&P 500. For example, if the S&P 500 opens the day at 1455 and stays between 1450 and 1460 all day, volatility is low. If it moves between 1400 and 1500 then volatility is high. Easy enough.

With that said, between Apr and July 15th the index averaged 14.05. From July 15th to EOM, it averaged 19.44 ending at 23.52 today. Volatility is increasing.

The reason vol (volatility) is increasing is simple. Housing. It all revolves around housing right now. The market wants to go up but every other day something negative about the housing market comes out. You would think that the worse case scenarios would already be baked in.

Why does housing have such an effect? To put it simply, the economy is run by consumer spending and if that spending dries up, then the economy and the stock market go down. So if consumers have to allocate their disposable income elsewhere, like higher mortgage payments than businesses don't sell as much and they miss earnings causing stocks to go down.

More later...