VIX Slammed To 2014 Lows

Tyler Durden's picture


In a greatly ironic moment for capital markets, minutes ahead of the Fed's Bill Dudley speaking about "low volatility in markets is a cause for concerns, indicates complacency," VIX just collapsed in a pile of "we don't need no stinking protection" volatility selling to its lowest level since December 2013 and almost its lowest since April 2013 recovery lows.


Dudley yesterday...


And VIX today...


Don;t fight the Fed - unless they say "sell" stocks or "buy" vol.

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Wed, 05/21/2014 - 10:05 | 4781016 Aknownymouse
Aknownymouse's picture

Someone is caught short on the VIX and is trying to get out.

Wed, 05/21/2014 - 10:57 | 4781242 ACP
ACP's picture

Whatddyaknow, the 11 am spooz BANG-UP, right on schedule, just like Monday and Tuesday.

Wed, 05/21/2014 - 12:12 | 4781603 flacon
flacon's picture

Want to make instant cash working from home? Buy VXX puts:


Wed, 05/21/2014 - 10:08 | 4781025 km4
km4's picture

China signs 30-year $400B deal for Russian natural gas via @HoustonChron

Wed, 05/21/2014 - 10:09 | 4781037 km4
km4's picture

The agreement "opened the door for Russia to enter into Asia's gas market," said Keun-Wook Paik, senior research fellow at the Oxford Institute for Energy Studies. Politically, the deal has provided "a breathing space for Russia," Paik said. "Russia, and Putin, can demonstrate it's not completely isolated because of the Ukraine crisis. Russia has demonstrated that they have a very reliable strategic partnership with China."

Wed, 05/21/2014 - 10:11 | 4781041 km4
km4's picture

The contract "particularly important" at a time when Europe has threatened to cut gas imports and reduce its dependence on Russia because of the Ukraine crisis, said Alexander Lukin, a deputy head of the Russian Diplomatic Academy under the country's Foreign Ministry, quoted by the RIA Novosti news agency.

"We will be able to show to Europe that we have other customers," Lukin said.

Alexei Pushkov, a Kremlin ally who is head of the international affairs committee of the Russian parliament's lower house, said on Twitter: "The 30-year gas contract with China is of strategic significance. Obama should give up the policy of isolating Russia: It will not work."

Wed, 05/21/2014 - 10:22 | 4781097 SheepDog-One
SheepDog-One's picture

You missed reading that header story on ZH how?

Wed, 05/21/2014 - 10:08 | 4781029 FieldingMellish
FieldingMellish's picture

Yesterday's VXX dump was the tell. It shows the level of un-riggedness when even the volatility of a market is played with and not just the market itself.

Wed, 05/21/2014 - 10:09 | 4781032 The Axe
The Axe's picture

The VXX is the most BROKEN POS in the markets today..totally useless

Wed, 05/21/2014 - 10:13 | 4781051 pound the vix
pound the vix's picture

I wonder how much an advanced copy of Yellen's speach is going for?????

Wed, 05/21/2014 - 10:16 | 4781070 Eyeroller
Eyeroller's picture

Who would be stupid enough to pay money for the Ponzi Munchkin's doved-up speech?

Wed, 05/21/2014 - 10:15 | 4781066 pound the vix
pound the vix's picture

If the VIX measures volitility why doesn't it go up on both the massive up days and massive down days and fall on do nothing days?

Wed, 05/21/2014 - 10:17 | 4781073 Eyeroller
Eyeroller's picture


There is no such thing as bad news anymore.


Wed, 05/21/2014 - 12:04 | 4781564 TheHamburglar
TheHamburglar's picture

VIX measures implied volatility, which is the volatility implied by the price of put and call options. Essentially VIX measures the market's perception of market volatility in the near future and not a measure of the actual volatility of the day.

Wed, 05/21/2014 - 10:17 | 4781075 DavidC
DavidC's picture

Dudley's an idiot, or compliant, if he doesn't realise the VIX is a paper market for the banks to play with, just like the paper market in Gold, that bears no relation to its physical counterpart.

The tail wags the dog.


Wed, 05/21/2014 - 10:23 | 4781105 Arius
Arius's picture

ever thought that he might not mean what he says?


i would not say these guys are idiots, you underestimate them at your own peril.

Wed, 05/21/2014 - 10:31 | 4781140 DavidC
DavidC's picture

I take your point but given the disappointing snippets of Bernanke's $250,000 speeches and the following link I wonder how clever they really are.


Wed, 05/21/2014 - 11:15 | 4781319 NotApplicable
NotApplicable's picture

Difference is that Bernanke is NOT a banker. He is a Keynesian clown from the hallowed halls of academia whose job is to smear lipstick on the pig named "modern finance."

If you ever expected to hear him say something clever, you're not understanding why he was chosen in the first place.

Wed, 05/21/2014 - 10:18 | 4781080 AccreditedEYE
AccreditedEYE's picture

I have said over and over... LT VIX charts and failure to break out yesterday... why even look at this anymore? Call me when it rips thru 22... till then, it's "contained".

Wed, 05/21/2014 - 10:18 | 4781082 SheepDog-One
SheepDog-One's picture

For all the up-down arm flapping in stawk indexes, it's all just an illusion we're right where we were in January still.

Wed, 05/21/2014 - 10:22 | 4781100 Eyeroller
Eyeroller's picture

And remember what happened at the end of January...

Wed, 05/21/2014 - 10:31 | 4781144 DavidC
DavidC's picture

One can only hope!


Wed, 05/21/2014 - 10:19 | 4781083 km4
km4's picture

India’s new prime minister is big on solar power

The Oil & Gas industry says to Obama India is a terrorist country ;-)

Wed, 05/21/2014 - 10:19 | 4781084 oklaboy
oklaboy's picture

nothing a little siracha/HFT sauce won't cure

Wed, 05/21/2014 - 10:22 | 4781087 Eyeroller
Eyeroller's picture

Yes, VIX was very low in December 2013.

But look what happened at the end of January 2014.


Wed, 05/21/2014 - 10:21 | 4781090 MFL8240
MFL8240's picture

American economy is a circus act let by the fool in chief and the troll at the Fraudulent Reserve Bank.  Historic deal between Russia and china and news Russia bout 900,000 ounces of Gold last month and the Wall Street filth is slaming the VIX and buying equities while the dollar is maniulated up and Gold manipulated down. 

Wed, 05/21/2014 - 10:22 | 4781095 Calculus99
Calculus99's picture

A hard concept to grasp with trading is that low vol normally leads to higher vol and high vol normally leads to lower vol.

Our minds aren't wired this way as we think high risk (vol) normally always leads to higher vol and low and falling vol leads to even further periods of contraction.

This is why a very smart trader once said - to be a success in this business you've got to screw your head on, so when you brush your hair in the morning you do it with your back to the mirror.

Timing is of course a hell of a big issue with the above, but right now, using the smart man's reasoning, we should all expect HIGHER volatility over the next severl months.

PS. FX traders are whinging and whining about the lack of action in their markets. Last night I looked at about 50 crosses (daily chart) and the charts indicate some great movements over the next few years. If you can hold on to your job in the meantime, great times should return.

Wed, 05/21/2014 - 10:32 | 4781145 SheepDog-One
SheepDog-One's picture

'Trading'... the ZH article last evening said the markets are full of expert 'traders' who know the 'price' of things, but none of them know the 'value' of anything.

Wed, 05/21/2014 - 11:35 | 4781429 hootowl
hootowl's picture

In a few years we'll all be trading from cardboard boxes over a heating grate in a back alley somewhere, while trying to recover from the most recent beating and confiscation of our belongings by the local gendarmes trying to remove us from their jurisdiction.

Wed, 05/21/2014 - 10:26 | 4781117 JustObserving
JustObserving's picture

How can there be any volatility in completely fake, manipulated markets? The Fed is able to control the markets precisely where it wants them to be.  Finally the VIX is reflecting that reality.

Similarly the low prices for gold and silver reflect the reality that the Fed has been able to control their prices every effectively for the last three years despite trillions of dollars of QE.

Wed, 05/21/2014 - 10:27 | 4781123 hugovanderbubble
hugovanderbubble's picture

XIV is the product

Wed, 05/21/2014 - 13:27 | 4781910 Haager
Haager's picture

Ah, L’économie c’est moi.

Wed, 05/21/2014 - 10:29 | 4781133 madbraz
madbraz's picture

Dudley says "how come low volatility, I give $200 billion in treasury collateral every day to support  gambling in the repo markets - could there be an association?"

Wed, 05/21/2014 - 10:31 | 4781146 hugovanderbubble
hugovanderbubble's picture

Short Munibonds  too

Wed, 05/21/2014 - 10:32 | 4781147 orangegeek
orangegeek's picture

VIX hit 10 prior to 2007.  So May's VIX is 14 and we are at all time highs. 


Wed, 05/21/2014 - 10:33 | 4781149 flowlessflow
flowlessflow's picture

It's always quiet before the storm   - Sailor

Wed, 05/21/2014 - 10:33 | 4781154 Eyeroller
Eyeroller's picture

"The spice is the worm!  The worm is the spice!"


Wed, 05/21/2014 - 10:35 | 4781156 JenkinsLane
JenkinsLane's picture

K-Hen's on fire today!


Wed, 05/21/2014 - 10:34 | 4781159 DavidC
DavidC's picture

Just a thought. The European parliament elections are tomorrow - if they get as much of a trouncing as is expected, there could be some fun and games tomorrow and Friday.


Wed, 05/21/2014 - 10:35 | 4781163 Eyeroller
Eyeroller's picture

And no more FED pump for the week, should be very interesting...

Wed, 05/21/2014 - 10:38 | 4781168 Kaiser Sousa
Kaiser Sousa's picture

cool. i get to sit back without rushing and buy more physical Silver at these stupid and totally fraudulent phony paper prices....

al thewhile with the same amount of debt coupon dollars as last month...

thanks u fucking sociopath MonneyChanger cocksuckers.

Wed, 05/21/2014 - 10:38 | 4781171 pound the vix
pound the vix's picture

Can anyone remember when we have had a vix spike premarket on no news?  Why every week before a holiday do we get a pre and open market ramp, vix smash on no news?

Wed, 05/21/2014 - 10:41 | 4781186 hugovanderbubble
hugovanderbubble's picture

Mark to Unicorn¡

Wed, 05/21/2014 - 11:03 | 4781266 timmeh
timmeh's picture

can't wait to hear what the bitch have to say

Wed, 05/21/2014 - 11:06 | 4781283 FranSix
FranSix's picture

The VXX isn't moving, which should say that markets are heavily leveraged long with no apparent hedging. VXX should be bid, but there is also a complete absence of an inverted yield curve.

Wed, 05/21/2014 - 12:45 | 4781743 q99x2
q99x2's picture

It's an "L" shaped recovery. A lot of green shoots are showing up in the service sectir,

Is Greece going to fucking default? Head for the hills but watch out for the BLM machine gunners.

Aaaaaggggghhhhh its time to go to college. And yes my FAFSA check did come in.

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