What Does VIX Know?

Tyler Durden's picture

A funny thing happened as US equity indices pushed to new highs - levered this time by Bond and FX markets - and following the new normal US-Open-to-EU-Close pattern. VIX, that much talked-about contemporaneous indicator of concern (or complacency) took a divergent dive. Different this time? Maybe... Or are all those downside call-writers covering their levered losses and forced buy-ins in AAPL? Seems like that initial burst of recovery is fading fast now as AAPL drops back below its VWAP.


The normal day-pattern continues for S&P 500 futures...


HY and volatility did not play along early...


and VIX is notably divergent now...


and AAPL is fading now...

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redpill's picture

Q:  Just what kind of APPL is this?


A: Red delicious


We need a dedicated AAPL thread today to compile how brutally this impacted the momo hedgies.

Also can we have another gun thread so I can go on a profanity laced rant against Diane Feinstein after her shenanigans today?


fonzannoon's picture

I agree Redpill. I'd love to see a list of Hedgies and Mutual funds that are stuffed to the gills with some red delicious. Pension funds would be just as fun too.

Say What Again's picture

Wapner:  Oh shit!  The S&P is taking a crap!
Mandy: What will we tell the muppets?
Liesman: Hey Mandy, just show some cleavage!
Mandy: How about I make another faux-pas about "Down Under"


Say What Again's picture

I created my own little index.

X = VIX / @YG

Anyone care to guess where this has headed today?

flacon's picture

so I can go on a profanity laced rant against Diane Feinstein


Di-Fi is one motherfuckingassholeshitfacedbufoondickheadpieceofshitfucker!


And fuck you Bernanke! 


diane feinstein rubber masks:


redpill's picture

Both, it's a yoga position

Freddie's picture

I hear moaning and bitching from some Dems I know.  I like to rub their face in their own personal dog shit.  They voted for this. They shat all over.

F them, F TV and F Hollywood.

AlaricBalth's picture

This may help. 65% of APPL is institutionally held. Lots of hedgies and pensions. The heading for the 95 new holders who bought as of the 13F 9/30/2012 filing period is fun to read. Those guys got in right on time.


Central Bankster's picture

I was going to say a "rotten APPL", but that was just too easy.

Jason T's picture

Armstrong has been calling today "directional change" .. and since it has been going up, changing direction means goes back down starting today.   

fonzannoon's picture

I think the muppets have begun to re enter. The grand experiment to see how many times retail Joe will take a bat to the head and keep coming back for more is once again proving it can keep happening. Should be funny to watch from here.

walküre's picture

You took that bat and slammed the nail into the head. Joe is a stupid fuck.

LawsofPhysics's picture

What does this index know?  The best I got is that in order to book a profit (even in a manipulated market) you still need to sell

But I digress, there are no "markets" for true price discovery.

earnyermoney's picture

Bingo. Reason you hear Dimon, et al talking up stocks. They need some suckers to realize their "paper" gains. Then they'll short the market to sodomize the sheeple.

yogibear's picture

Everyone knows the VIX is one of the greatest shorts around. While Bernanke and the Fed continue to have their banks buy any downturn it's guaranteed money.

It's been one of the most profitable shorts to date.

HelluvaEngineer's picture

pennies in front of a steam roller at this point

dcb's picture

I was looking at tlt, if the market goes up now the bond bubble bursts

fonzannoon's picture

dcb that plays into my black swan this year. Bernak resigns for medical reasons. He knows this market can't keep going up without people dumping their bond funds. Then he stops QE? Bwahahaha. Rates get away from them. His only saving grace is a big market dump. Which is certainly possible.

Sophist Economicus's picture

Rates will never get away from the FED as long as :


1.  there is no accountability for what is in their balance sheet and


2.  all it takes to buy Govies is the press of a button

SmoothCoolSmoke's picture

You gotta take the trade of SP back to 1500 by the close.  Seems like a lock.  Although it's getting late in Davos and perhaps the folks who have to give the ramp order are too hammered on bubbly and blow and viagra.

eclectic syncretist's picture

The folks from Davos are going to be making some whispered phone calls back to their henchmen to sell the rally in equities and buy gold and silver!!!!

busted by the bailout's picture

Now that mission 1500 has been accomplished, it's time for "them" to unwind long and rewind short for a few weeks?

MFLTucson's picture

The US finacial sytem is an outright fraud and none of this makes sense anymore to anyone


DTCC 1999's picture

Maybe these repeated intra-day S&P / VIX divergence comparisons would be more insightful if the sample size wasn't one day and the results were given afterwards.

Squid Vicious's picture

vix not behaving today, either the jig is up, or the algo-bots are just warming up to smash it down again

eclectic syncretist's picture

This market is overbought.  I went short a few contracts.  Felt like they were practically begging me too.  Anyway, it should take at least a little break from just hitting 1500.


Damn, now I have to watch the market to know when to cover.  Hope it isn't tomorrow LOL! 


Could someone please step out to the middle of the floor of the exchange and yell "FIRE" as loud a possible?  Thanks.

electricgorilla's picture

J.P Morgan takes your deposits and trades with them to ramp up market. The the foolish guy who doesnt know his money is being speculated with withdraws tha same money and puts it into the market...then J.P. Morgan takes that money straight out....nice little bait and switch...Using your own money to make you get into the market with your own money....

bnbdnb's picture

The employed to dow points ratio is now below 12. The last two times (2000,2007) this happened we had a 25%-30% correction.

busted by the bailout's picture

That's a new one on me; got a source for it?

bnbdnb's picture

Just take the count of the employed divided by the dow.



are we there yet's picture

That was before Bernankie took over market control so massively. Going short 25% in a gamed market is risky for me.

AynRandFan's picture

May 22, 2007.  The last time the VIX traded at 12.30, where it's been hitting the last few days.  Oh, those were the days!

What a co-inka-dink!  The S&P 500 closed at 1,524 that day, which a few months later was the lover's leap of the crash.