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Stocks continue to rally seemingly every day without a hint of a correction on the horizon. Back in December I curiously noted that the volatility index was reaching an important mark on the downside signaling a high degree of investor complacency.

Volatility continues to wallow around these lows (even going sub-15 today).

Curiously, as the S&P 500 keeps making new relative highs…

…the Russell 2000 Index (small cap companies) has dramatically lagged behind for over a month.

The last time the ratio between the two indexes turned down like it did in December it signaled the onset of a correction. The S&P 500 lost about 20% from May to August last year. This time, however, despite the lowly VIX and lagging small caps the “Newtonian rally” continues.

Is this just a bull market scaling the “wall of worry” or are stocks running on empty?