NEW YORK (TheStreet) -- The S&P 500 continued Wednesday's gains, up 1.6% Thursday. The move higher has caused the volatility index to collapse, according to Jon Najarian, co-founder of optionmonster.com and trademonster.com.
The CBOE Volatility Index (VIX.X) saw a lot of bearish bets in the options market, which is good for the U.S. stock market as the two assets are inversely correlated, he said on CNBC's "Fast Money Halftime" show.
The S&P 500 is up impressively from Tuesday's low, said Josh Brown, CEO and co-founder of Ritholtz Wealth Management. While a rally always has the potential to fizzle out, the SPDR S&P Retail ETF (XRT) is making new 52-week highs, while small-caps appear on the verge of a breakout.
"I'm adding to my Morgan Stanley (MS) position in the Action Alerts PLUS portfolio," said co-manager Stephanie Link, who also serves as TheStreet's chief investment officer. Wednesday's price action in the S&P 500 was encouraging as the Federal Reserve signaled the U.S. economy continues to improve. It doesn't hurt that oil prices seem to have stabilized.
With oil near these levels, it's "unambiguously bullish" for the economy, Najarian said. Not just in the sense that 70% of U.S. GDP is comprised of consumer spending, but because businesses will have lower input costs. It's important that the commodity has found some footing and stopped declining each day, he said.