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Short-Term VIX Drops To Lowest On Record As Volume Collapses

Tyler Durden's picture


CBOE's short-term VIX product (which tracks the implied volatility in stock options for a 9-day maturity) dropped to its lowest since inception this morning at 10.16%. The spread to the more 'usual' maturity VIX index is over 3.3 vols which isthe most inverted on record and thus the most short-term complacent equity investors have been since the lows in 2009. The exuberance of the last few days is equally and oppositely matched by the sheer lack of enthusiasm in volumes. S&P futures volume is 33% below recent averages today and as the chart below shows, it is clear where the volume in this "market" remains.


Short-term VIX drops to its lowest on record - and complacency is at its highest since the lows in 2009


Volume for the entire ramp has been dramatically below average and today's is 33% below average...


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Fri, 02/14/2014 - 15:38 | 4437312 flacon
flacon's picture


Fri, 02/14/2014 - 15:43 | 4437319 Say What Again
Say What Again's picture

Did anyone else notice how there was a feeding frenzy up to about to about 13:45 or so, and now its like a ghost town.  Nothing is happening.  It feels like we're in after-hours trading.  This is weird

Fri, 02/14/2014 - 15:47 | 4437335 kliguy38
kliguy38's picture

Algobots are short circuiting fighting each other with cyber swords

Fri, 02/14/2014 - 15:54 | 4437358 flacon
flacon's picture

Take a look at that two hour RSI on SPY it's at 80.5! Screaming overbought in the short term! Tuesday should be fun. 

Fri, 02/14/2014 - 16:00 | 4437376 Divided States ...
Divided States of America's picture

Yeah fuckin feeding frenzy continues like a group of rabid pirahnas munching on bear carcasses....amazing the bunch of teddies out there being destroyed

The Fed has succeeded in causing inflation but they have tagged the S&P (Salt & Pepper) with the precious metals complex now so as to stave off the hyperinflation effects on the sheeples for as long as possible...but these Federal Reserve idiots dont realize that most people DO NOT participate in stock market gains.

Fri, 02/14/2014 - 16:18 | 4437445 Say What Again
Say What Again's picture

15:13 Update  WARNING to the FED.  A small amount of selling was detected in the ES, TF, & NQ.  Please take appropriate action immediately!

Fri, 02/14/2014 - 17:26 | 4437678 ACP
ACP's picture

@Divided They DO realize most people don't participate in stock gains. That's exactly why they're doing it.

Fri, 02/14/2014 - 23:15 | 4438659 X_mloclaM
X_mloclaM's picture

i think this has merit

also, has everyone been buying XIV?!!!

Fri, 02/14/2014 - 16:03 | 4437392 Headbanger
Headbanger's picture

Fucking A dude!! 

Hit the D-rings now!! Eject! Eject! Eject!!

Fri, 02/14/2014 - 15:51 | 4437349 asteroids
asteroids's picture

It's just computers. No humans are left. The emotion is gone. That's why the VIX is so low. Nothing but greed, no fear. We know this can't end well.

Fri, 02/14/2014 - 15:56 | 4437361 Say What Again
Say What Again's picture

From an algorithmic point of view, the VIX is just another asset that can be arb'd along with the major indexes and futures, etc.

Fri, 02/14/2014 - 16:17 | 4437433 PontifexMaximus
PontifexMaximus's picture

Janet want's it this way!

Fri, 02/14/2014 - 16:15 | 4437425 SAT 800
SAT 800's picture

I just sold short two S&P500 contracts @1838.5 basis Mar. '14. It's a kind of a triple top at this point and looks like a blow off top; today. Buyer's remorse expected next week.

Fri, 02/14/2014 - 16:41 | 4437495 Fight-Club
Fight-Club's picture

Anyone reading this without Ad Block in your browser (Chrome, Safari, anything but IE) is contributing to the problem, and being inundated with ads.  Ad revenue generated by online marketing companies is helping to fuel this bubble.

Fri, 02/14/2014 - 15:42 | 4437322 Dr. Engali
Dr. Engali's picture

It sure feels like we are on a knife's edge, but it's felt like this multiple times in the past few years. Good time to take some profits.

Fri, 02/14/2014 - 15:50 | 4437347 hobopants
hobopants's picture

I get the feeling that all these assholes are trading on something we don't know (more so than usual). It feels like they are getting shit in place to raise the curtain, but like you said it's been that way off and on for the last 5 years.

Fri, 02/14/2014 - 16:08 | 4437415 Divided States ...
Divided States of America's picture

Doc, thats for those who HAVE profits to take....the only take I have had is being constantly taken out to the cleaners.

THis market dont even have a down tick anymore..

Fri, 02/14/2014 - 16:14 | 4437431 SAT 800
SAT 800's picture

No. it's the mass mind. the last 500 sheep just joined the mob.

Fri, 02/14/2014 - 16:04 | 4437387 Headbanger
Headbanger's picture

No...  I feel like I'm caught in one of them really weird Twilight Zone episodes where it can't be real... but it is..

It can;'t be real!! Can it??


Fri, 02/14/2014 - 16:04 | 4437394 101 years and c...
101 years and counting's picture

nope.  all bailouts are fed bs are done.  this is the final short squeeze before the big drop.  no one expects it.

Fri, 02/14/2014 - 16:07 | 4437401 Headbanger
Headbanger's picture

I do you fucking mook!

Fri, 02/14/2014 - 16:17 | 4437435 SAT 800
SAT 800's picture

Then stop shouting and go short.

Fri, 02/14/2014 - 16:28 | 4437455 fonzannoon
fonzannoon's picture

you guys are insane, no offense. if the violence with which that 5% dip got bought does not convince you that this charade is continuing full tilt, nothing will. good luck with those shorts. 

Fri, 02/14/2014 - 16:37 | 4437493 Dr. Engali
Dr. Engali's picture

They actually believe they will make money on the big short when this thing finally goes tits up. ... Lol.

Fri, 02/14/2014 - 17:14 | 4437637 unrulian
unrulian's picture

Holding a full house or 3-o-kind, i always check with fake trepidation until the last bet and go all-in...they know what they're doing it's their "market" and they always win; in this case i'll hold my PMs until the game is over

Fri, 02/14/2014 - 17:20 | 4437668 Headbanger
Headbanger's picture

Fonz.. WTF do you mean "no offense" that we;re insane!!??

It took me a long long time to finally reach this point of insanity and I'm damned fucking proud of it!

Do you hear me now!!??

Fri, 02/14/2014 - 17:49 | 4437749 fonzannoon
fonzannoon's picture

loud and clear my man.

Fri, 02/14/2014 - 15:47 | 4437325 MFLTucson
MFLTucson's picture

I see the Wall Street filth is back at it sucking the last few billion out of those too stupid to understand that the economy is in a depression. Participation rate at a 35 year low and stocks at all time highs?

Fri, 02/14/2014 - 15:51 | 4437330 Law97
Law97's picture

The shorts have been crushed for several years following volume.  Every pullback has been on high volume only to be followed by a light volume melt-up.  Over and over.  Volume used to be a reliable measure of the conviction of a move, but along with just about every other formerly reliable indicator, it has been thrown out the window since 2009. 

Fri, 02/14/2014 - 15:55 | 4437353 Say What Again
Say What Again's picture

I agree 100% with your comment.  I feel like everything I learned over 20+ years in this business is now useless.  I don't know if I will even remember how to operate in these "markets" once the central bankers stop their manipulation.  Its not just the Fed -- Its the majors -- Fed, China, Japan, Europe.

Fri, 02/14/2014 - 16:04 | 4437389 Thought Processor
Thought Processor's picture

The whole market is on autopilot now.  It has been for a while.  I think this is what HFT is really being used for in the big houses.  Once you get to that level of turnover you can control everything that happens in the markets.  So why not.


They will go down only when it serves a larger purpose.  There is a larger game of chess being played here me thinks and the markets are but one pawn (albeit a large one) on the board.

Fri, 02/14/2014 - 16:22 | 4437456 Say What Again
Say What Again's picture

OK, what are the other "pieces" on the the board?  Are you referring to political issues?

Fri, 02/14/2014 - 16:27 | 4437468 NotApplicable
NotApplicable's picture

I'm guessing the ever-present CB/Sovereign debt ponzi expansion.

Fri, 02/14/2014 - 16:45 | 4437519 g speed
g speed's picture

demographics --peak energy--changing technology ---world wide belief systems--need more??

Fri, 02/14/2014 - 17:22 | 4437649 Thought Processor
Thought Processor's picture

Yes to all of the above.   The current economic system can not operate in an environment where energy output is declining.  The whole system would go into a long term deflation of sorts.  

Who would be no. 1 on the list at risk of systemic implosion in a long term deflationary invironment?  Big banks.  

Who controls the economy:  The owners of the big banks. 

Now who had all their liabilities and bad assets extracted from them during the 2008-2009 squeeze?  The big banks.    And who thereafter benefited most with TARP and now legislation?  The big banks.

No. 1 is simply looking out for no. 1.

My guess:  The next thing on the plate will be a manufactured breathtaking event that will overnight have people screaming for a new system to replace the old system.  Where the average person will be begging to have all their funds transferred into MyRA accounts which will be 'safely protected' from the ensuing chaos.

All while the currency it is based on is being trashed.  99% of people have no clue how currencies are being debased and manipulated in here.  

My gut says something will happen with regard to Japan that will act as a trigger.  Then we are off to the races as everything unfolds, perhaps as planned.

Conspiracy theory.  Sure why not.  But at this point the conspiracy theories are making a hell of a lot more sense than what is being publisized.

Besides if you 'owned the joint' and new it was going to blow up, what would you do?

You would protect the real assets you own and then do a controlled demo on everything else.  But it has to be masked- so it turns into a game of three card monte (on a grand scale perhaps).

Watch the hands.  Also watch for evidence of this being destroyed (banker suicides anyone?).

It's all pretty blatent, and increasingly brazen at this point.



Fri, 02/14/2014 - 18:46 | 4437912 Freddie
Freddie's picture

Dude - just buy the stocks or options of stocks the police state favors.  Anything Elon Musk, Bezos, Google boys, Zuckerberg, Tweeter.  If they contribute to Obama or the Dems then their company will do well and will be "supported."

Fri, 02/14/2014 - 16:07 | 4437409 El Hosel
El Hosel's picture

The Federallies are in charge of the supply and the demand. Apparently its all scripted, even the 7% token corrections to give the bears hope!

Fri, 02/14/2014 - 16:30 | 4437469 NotApplicable
NotApplicable's picture

Well, ya know what they say, "Nothing moves in a straight line."

Gotta put some wiggles in it so that it appears life-like.

Fri, 02/14/2014 - 16:18 | 4437437 SAT 800
SAT 800's picture

Wrong. it just needs to be read differently.

Fri, 02/14/2014 - 15:52 | 4437345 swanpoint
swanpoint's picture

Why worry? The Debt Limit has been suspended until March 2015, at which point it'll be suspended until 2115.


The Debt UN-Limit.

Fri, 02/14/2014 - 23:28 | 4438692 X_mloclaM
X_mloclaM's picture

and there after debt can be issued, so long as the cash was 'spent' before the same date? need to go look up govt definition of spent, cause that's weird how that would work. Why have the provision, however, if it didnt serve a purpose

Fri, 02/14/2014 - 15:50 | 4437346 Cannon Fodder
Cannon Fodder's picture

If there is no volume, doesn't that make the market that much more easy to manipulate with that much less money?

Fri, 02/14/2014 - 16:05 | 4437393 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Yes and it's happening in broad daylight.

Fri, 02/14/2014 - 16:16 | 4437430 Thought Processor
Thought Processor's picture


I was thinking the same thing.  All of this is so damn in your face now.  They must have total and absolute control over everything now so why even bother covering it up.



Fri, 02/14/2014 - 16:47 | 4437526 g speed
g speed's picture

ah--not everything--

Fri, 02/14/2014 - 23:28 | 4438699 X_mloclaM
X_mloclaM's picture

also, bear in mind, a 'slow release' is desireable, so no effort to 'cover it up', whatever 'it' is, necessarily becomes more saturated when the game is played well

Fri, 02/14/2014 - 15:54 | 4437352 thismarketisrigged
thismarketisrigged's picture

i do not really have much to add, this shit just keeps getting more ridic day by day.


i will be very satisfied though if when this is all over all bankers and ppl on wall st r fucking prosecuted or have jumped from the highest building around.


the fraud continues

Fri, 02/14/2014 - 15:56 | 4437357 T-NUTZ
T-NUTZ's picture

what inflation?

Fri, 02/14/2014 - 15:56 | 4437359 Spungo
Spungo's picture

Yes, relax my pretties. I have a $4000 order to buy the 2x VIX as a 5% trailing stop. That means I buy in when it rises 5% from its lowest point. Can't wait for some panic to hit the markets!

Fri, 02/14/2014 - 16:04 | 4437369 El Hosel
El Hosel's picture

Vengeance and furious anger toward anyone that interferes with todays low volume chop to an all time high on the SPY.


Fri, 02/14/2014 - 16:01 | 4437372 thismarketisrigged
thismarketisrigged's picture

not that this is breaking news to the zerohedge ppl, but i think regardless of how bad things r, friday in particular is 1 percent plus green day.


it does not matter how bad data is, earnings, or jobs reports, we will always finish up 1 percent on friday in this shit show.


makes lots of sense how '' investors'' are buying at these levels going into a long holiday weekend.


i hope they all get what they deserve

Fri, 02/14/2014 - 19:06 | 4437975 hobopants
hobopants's picture

"investors" is right, what we have are speculators trying to guess which CB is going to out print which and using the markets as a parking place for their borrowed funny money. Nobody believes in this thing, it's just a few people taking the silverware off the tables on there way to the lifeboats.

Fri, 02/14/2014 - 16:00 | 4437379 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Perhaps investors are moving over to JNUG ?

Fri, 02/14/2014 - 16:06 | 4437402 NDXTrader
NDXTrader's picture

We just saw the top. It may hold into the close, but look out below. They got everyone they could in to this sucker

Fri, 02/14/2014 - 16:24 | 4437458 NDXTrader
NDXTrader's picture

I got it within a minute. Almost perfect double tops on Nas and S$P. negative divergences everywhere. Massive head and shoulders formed on Dow after 61% retracement. Bat pattern on the S&P. should get really ugly next week

Fri, 02/14/2014 - 16:33 | 4437482 NotApplicable
NotApplicable's picture

So... maybe tomorrow is "Collapse Day" after all?

Fri, 02/14/2014 - 16:08 | 4437416 Rising Sun
Rising Sun's picture

All the banksters have ganged up on the retailers. 


Banksters have been rolling the market over to suck in the shorts and then turn it back up.


Why?  Because the herd isn't buying up bankster inventory - this is the only way out for banksters.


So how do you make money on the short side???  Keep you positions very small. 


Banksters have to show a profit - if they can't short squeeze their way to profit, the scam is over and  it all tanks.

Fri, 02/14/2014 - 16:09 | 4437419 1fortheroad
1fortheroad's picture

With Yellen dont be a short selling, this market isnt repelling!!

Fri, 02/14/2014 - 16:16 | 4437429 Fiat Burner
Fiat Burner's picture

I'd say the shorts are just about extinct now.  Yellen will be sorry they were all squeezed out when this bitch blows. No one is going to be there to buffer it on the way down.

Fri, 02/14/2014 - 16:27 | 4437467 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Why don't we write some short selling algos!

Fri, 02/14/2014 - 16:18 | 4437436 adr
adr's picture

If I was given a million dollars and knew I was going to get another free million every day, I might feel generous and pay 100x the value of something just for the fun of it. If nobody else is buying, the price of what I bought would look like it skyrocketed. All of a sudden everyone will think the real value of the product skyrocketed and rush to get in on the action. Obviously if there were alot of buyers around most of them wouldn't be stupid enough to overpay by 100x. Low volume is a playground to lure in the suckers.

The Fed has distorted everything because it has made it easy for these psychopaths to make money without having to work for it. When you don't earn something, you lose the value of it. When you can just print more money, you don't care what things cost as long as you can have more money to pay for it. 

Investment banks are essentially counterfeiters and behave just like them. At first they are carefull, but once they start buying with the funny bills and don't get caught they get more brazen. Now they are paying 1000x the value of a company just for the hell of it. Hoping that will bring buyers with real money into the market so the funny bills can go out and real earned cash ends up in the counterfeiter's hands.

The stock market is a drug filled Vegas hooker orgy and the Secret Service is nowhere in sight. Since there is no fear of getting caught a few of the guys might start tossing party guests off the roof just to see what happens. Maybe a couple guys who knew where the money came from.


Fri, 02/14/2014 - 16:22 | 4437457 vote_libertaria...
vote_libertarian_party's picture

3 day's quite....way too quite


I say with the 1+ year debt ceiling raise 1 or 2 ratings agencies downgrade US Treasuries after hours


(of course in the Bizarro World we live in all stocks and bonds will rally 10% on Tuesday)

Fri, 02/14/2014 - 16:38 | 4437489 El Hosel
El Hosel's picture

Check out GS... Little or no bounce for lloyd and the boyz off "the correction" low, have they been kicked out of the algo rally club?

Fri, 02/14/2014 - 17:00 | 4437579 BubbleBobble
BubbleBobble's picture


There is no growth... and so we have a market of extremes.

There was a time when a good honest bank (there may have been one or two) could prosper right along with a boomer demographic that was driving the economic engine steady and upward...  but that was from 1974 to 1999.    These days there is no growth, and the only way to make money is with volatility.  Banks don't care which way the markets move, as long as they move. 

Just look at this chart... how in the world can bank or hedge fund make money in a no-growth economy?  Next to pillaging emerging market economies, the best option is to slam some retail investors around with boom/bust credit cycles and a little marketing rigging making for good measure...


Fri, 02/14/2014 - 17:01 | 4437593 enloe creek
enloe creek's picture

doesn't matter... cool people buy stocks it is that simple. folks want to buy stocks and chat up the buddies about zynga and shit while thinking about screwing the guys ole lady

you guys aren't cool like them 

Fri, 02/14/2014 - 17:08 | 4437617 TheRideNeverEnds
TheRideNeverEnds's picture

Makes sense, after all, this time is different what with us having reached a new paradigm and all; one in which we can just print our way to prosperity with no consequences whatsoever as all meaningful production is moved completely out of america and our economy transitions to click farming internet adds and selling each-other our houses. 


Its surprising when you consider the foregoing that the ES was only up 10 today, that is basically a down day in the new normal market.

Fri, 02/14/2014 - 18:07 | 4437813 Cleetus
Cleetus's picture

Its the weather.  ((((YAWN))))


Fri, 02/14/2014 - 22:56 | 4438628 Westcoastliberal
Westcoastliberal's picture

Nothing I can think of is NOT manipulated.  Nothing.  Seems the suspension of "mark to market" was taken as a tanamount okay for massive fraud, which is what today's market, entire government, press, and major corporations are today.

I saw this coming when all the mergers and roll-ups started back in the 80's. LBO's, etc.  All that shit needs to go away along with all the "creative financial products" CDOs, Securitized whatever, etc.  Until that happens we're in quicksand.  Until, that is, the bottom drops out:

Talk about a "dip in your investment"!

Sat, 02/15/2014 - 01:12 | 4438879 Cdn1
Cdn1's picture

Author says "and complacency is at its highest since the lows in 2009"  ?   Who was complacent in 2009 ?

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