Rising VIX Awaits Santa

Markets are slightly lower in early trading after a nice bounce in yesterday's session.  There wasn't a ton of news today to account for the lackluster start, but overseas markets were subdued as well.

In economic news, the December NAHB Housing Market Index rose to 58 from 55.  But homebuilding stocks are pretty flat on the news.

In corporate news, Boeing (BA) authorized an additional $10 billion buyback and raised its dividend 50%.  That's a lot of money to return to shareholders.  MMM also raised its dividend 35% and reiterated 2014 guidance.  Increased buybacks and dividends continue for large corporations and should be in vogue again in 2014.

Asian markets ended mixed overnight.  Money market rates in China are on the rise once again after the PBOC chose not to provide additional liquidity for the 4th day.  One-month rates climbed 68 basis points to 6.23%.

Europe's markets are lower today.  Eurozone CPI came in at 0.9% year/year.  Germany's ZEW Economic Sentiment rose to 62.0 from 54.6.

The 10-year yield is roughly flat at 2.87%.

Trading comment: One interesting note was that although the market closed near its highs yesterday, the VIX also closed at its highs.  This is a bit unusual and indicates traders didn't necessarily buy in to yesterday's rally.  The VIX closed yesterday slightly above the 16 level and this morning is another 2.6% higher to 16.45 currently.  This is the highest level in 2 months for the volatility index and likely indicates that the market has some more work to do on the downside.  Many folks are looking for the market to rally in this benign seasonal time of year, but its possible that the S&P 500 has a date with its 50-day moving average first.  Right now the 50-day average resides in the SPX 1765 area.  So we are keeping a little powder dry as things look like they might pull back a little more.