S&P 500, market volatility rise ahead of February CPI data

The big three stock market indexes (^DJI, ^IXIC, ^GSPC) are trading mixed on Monday ahead of Tuesday's Consumer Price Index (CPI) inflation print. The S&P 500 and the market volatility index (^VIX) — also known as the fear gauge — are rising in unison coming off of last week's highs.

Yahoo Finance Markets Reporter Jared Blikre shares his observations on this market action, setting aside the time to take a look at gold prices (GC=F).

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

[AUDIO LOGO]

BRIAN SOZZI: Investors are on edge ahead of tomorrow's inflation reading. And we're also seeing volatility on the rise. Yahoo Finance's Jared Blikre is in the newsroom with a closer look. Jared.

JARED BLIKRE: It's a subtle trend. And it doesn't happen all the time happen all the time. But we are seeing the VIX rise with the S&P 500 on a couple of different time frames. Behind me, I have the S&P 500 in purple. You can see having climbed that wall of worry over the last few months.

And by the way, this is a one year chart. And then in cyan, I have the VIX. And you can see this broadening megaphone pattern that it is tracing out here. And in fact, we've seen this happen before last year. And how did this end? Well, it ended with a decline in the S&P 500. And there's been a lot talk about when exactly that will be?

So let me get to the S&P 500 here. I'm going to put some candlesticks on. This is a six-month chart. And we don't really have a lot of price history until we get down to about 4,800.

And the reason is we've just been climbing this wall of worry. Not a lot of volume having been transacted there. Really not a lot of back and forth. So when price does correct, it tends to come down to an area where you've had some back and forth. So that's that area in the red box that I'm outlining right here.

Now, below that, you've got the old highs. And we'll have to see what happens beyond this. But eventually, we will get a correction. And so that kind of satisfies hopefully, the potential for the levels that we would see.

Real quick before I want to go, I was mentioning stocks and stock volatility. We've seen gold and gold volatility exploding to the upside. And let me see if I can get a gold chart in there. Might take me more than a few seconds here. Some error operator. There we go.

Gold futures, what is this? Day eight now. We've seen this explosion to the upside. And then here's the Gold VIX. You can see that is elevated as well. So Gold VIX actually good for gold prices going higher.