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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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Thu, 01/24/2013 - 14:05 | 3183055 redpill
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?


Thu, 01/24/2013 - 14:08 | 3183064 fonzannoon
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.

Thu, 01/24/2013 - 14:10 | 3183069 Say What Again
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"


Thu, 01/24/2013 - 14:51 | 3183209 Say What Again
Say What Again's picture

I created my own little index.

X = VIX / @YG

Anyone care to guess where this has headed today?

Thu, 01/24/2013 - 15:02 | 3183237 flacon
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:


Thu, 01/24/2013 - 15:26 | 3183337 eddymunster
eddymunster's picture

That her face or vag?

Thu, 01/24/2013 - 15:54 | 3183436 redpill
redpill's picture

Both, it's a yoga position

Thu, 01/24/2013 - 16:35 | 3183581 Freddie
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.

Thu, 01/24/2013 - 14:32 | 3183139 AlaricBalth
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.


Thu, 01/24/2013 - 14:40 | 3183171 Central Bankster
Central Bankster's picture

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

Thu, 01/24/2013 - 14:06 | 3183059 Jason T
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.   

Thu, 01/24/2013 - 14:07 | 3183060 fonzannoon
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.

Thu, 01/24/2013 - 14:16 | 3183095 reload
reload's picture

Yup, as i said yesterday - the BBC radio 4 station did a `moneybox` phone in prog yesterday. Almost all the calls were widows and orphan types desperate to know how to get into the market and not `miss out`

- should I buy an ETF?

-should I but a tracker?

- well I dont know much about the stock market but my brother in law says its going up

needless to say the panel of `experts` were more than jappy to point them in the direction of the fleecing sheds.

Thu, 01/24/2013 - 14:56 | 3183222 walküre
walküre's picture

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

Thu, 01/24/2013 - 14:07 | 3183063 LawsofPhysics
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.

Thu, 01/24/2013 - 15:44 | 3183395 earnyermoney
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.

Thu, 01/24/2013 - 14:11 | 3183067 yogibear
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.

Thu, 01/24/2013 - 14:18 | 3183100 HelluvaEngineer
HelluvaEngineer's picture

pennies in front of a steam roller at this point

Thu, 01/24/2013 - 14:11 | 3183073 dcb
dcb's picture

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

Thu, 01/24/2013 - 14:14 | 3183083 fonzannoon
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.

Thu, 01/24/2013 - 14:34 | 3183152 Sophist Economicus
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

Thu, 01/24/2013 - 14:18 | 3183101 SmoothCoolSmoke
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.

Thu, 01/24/2013 - 14:52 | 3183213 eclectic syncretist
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!!!!

Thu, 01/24/2013 - 14:20 | 3183105 busted by the b...
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?

Thu, 01/24/2013 - 14:24 | 3183117 MFLTucson
MFLTucson's picture

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


Thu, 01/24/2013 - 14:35 | 3183146 DTCC 1999
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.

Thu, 01/24/2013 - 14:36 | 3183159 Squid Vicious
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

Thu, 01/24/2013 - 14:48 | 3183192 eclectic syncretist
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.

Thu, 01/24/2013 - 14:48 | 3183199 electricgorilla
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....

Thu, 01/24/2013 - 14:54 | 3183218 reload
reload's picture

just as deposit insurance limits are reduced :-)

Thu, 01/24/2013 - 14:56 | 3183226 bnbdnb
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.

Thu, 01/24/2013 - 15:10 | 3183291 busted by the b...
busted by the bailout's picture

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

Thu, 01/24/2013 - 16:08 | 3183466 bnbdnb
bnbdnb's picture

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



Fri, 01/25/2013 - 02:54 | 3185001 are we there yet
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.

Thu, 01/24/2013 - 16:21 | 3183541 AynRandFan
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.

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