VIX Hits 14-Month Low As Stocks Rally On Lowest Volume Of The Year

Tyler Durden's picture

Another day, another melt-up on the lowest volume of the year and VIX collapse. The Dow and the Nasdaq almost made it back to unchanged for the year; The Dow almost made it back to unchanged for May; but as the S&P surged towards its record highs once again, "most shorted" stocks led the way with a massive squeeze (almost 4% in the last 2 days). VIX broke back below 12 once again trading at its lowest in 14 months. Equity markets decoupled notably once again from bonds. Treasury yields rose once again at the long-end (30Y +8bps on the week, 5Y -1bps) but the steepening trend stalled today. The USD rose today (+0.2% on the week) led JPY weakness. USDJPY was in charge of stocks with a correlation over 90% once again. Commodities all closed higher with WTI testing $104 again. HP's 'early' release of earnings appeared to take the shine off things into the close as VIX gapped higher back above 12 to close...


This is the lowest NYSE volume in at least a decade - even for this holiday time of year...


Spot the down-day in the volume chart...


"Most Shorted" stocks have surged almost 4% in the last few days - almost tripling the broad market as hedge funds have yet another bad week...


Squeeze-a vu...all over again...


As the Momo stocks have exploded higher since last Thursday's lows...


Which is what supported the Russell and Nasdaq in their epic ramp of the last few days...


A close-up of today...


VIX was run even lower - to its lowest intraday since March 2013... (still room to go for the 9.39 all-time intraday lows on 12/15/06)


But look at the illiquidity in VIX... and a very ugly close once the HP reesults hit...


USDJPY was in charge of stocks...


Once again - stocks decoupled from bonds... that hasn't worked out so well recently for stocks...


Commodities rose on the day - despite a higher USD




Charts: Bloomberg

Bonus Chart: The spread between Q1 GDP and Q2 GDP expectations is now over 4percentage points as Q2 jumped this week to +3.5% consensus...


Bonus Bonus Chart: Looks like the Fed's transmission mechanism to housing has finally broken...

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hugovanderbubble's picture


LawsofPhysics's picture

mark to fantasy bitchez...


yes, it's very hard to price or value anything when fraud and corruption has completely destroyed the underlying currency you are trying to price everything in...


NoIdea's picture

"Putin speaks 06:30am EDT tomorrow morning. "

That's bullish, regardless of what he actually says

Okienomics's picture

Speaking of which, news about China dropping U.S. dollar transactions with one country... is this a temporary thing or a test case?

Tsar Pointless's picture

Buy in May, buy every day.

Haager's picture

May is the new September. Especially on Tuesdays. Oh, forget about Tuesdays, make it weekdays, 3:30pm, some exceptions allowed.

Spungo's picture

It's now called mark to algo accounting

LawsofPhysics's picture

Jump on in, the water is fine...

new game's picture

never mind the 16 foot croc...

The Axe's picture

VXX is the most broken  POS  ever EVER.....should not even exist!

Luke 21's picture

Yeah, and why shouldn't etf companies make vix futures more accessible for the retail investor through etfs? Do you want the government to be protecting you from your own mistakes?

Make_Mine_A_Double's picture

No volume ergo no volatility. Makes perfect sense.

Being at an all time highs with leverage far beyond 07' up the ass levels with the real economy in a depression. Sorry, no recession - we never crawled out of the gutter from 2008.

Can the Magic Monkey and his organ grinders keep it levitated through November? Not at the fast forward speed we are seeing events happen in SE Asia, Eastern Europe, etc.

LawsofPhysics's picture

Listen to us, "no volatility" after 48 hours and a several hundred point run up in the Dow,  fucking surreal.

Unknown Poster's picture

Is it even legal for VIX to do that at the end of the day?

FuzzyDunlop21's picture

Tyler, the numbers in the volume chart, what does it mean? They are negative, is it difference in volume compared to average for that time of day or something?

gatorengineer's picture

1900 tomorrow count on it....

Rainman's picture

LOL ....Chainsaw Meg was brought in to unshit the bed at she'll can 11K more employees. Foarward !

buzzsaw99's picture

hey i'd jam the market higher too if my bonus was based upon notional gains

disabledvet's picture

"Looks like we'll have to kill more than Americans this time. Make me some money worthless New York maggots!"

theyellowking's picture

Can you please explain what 'illiquidity in VIX' is referring to?  Illiquidity in the SPX options that comprise the VIX? Looking at volumes in June monthly options I would say that illiquidity is currently of no issue. So I would geniunely love to know what you mean when you say that people 'sell the VIX' every day. 


Honestly, I would love a response from one of the TDs.

nosoeawe's picture

now when is the the  lying, deceitful, supreme cunt and daughter of a whore going to have that stroke?

Lastline's picture

It's open season on Weekly OTM puts on Fryday. The low Vix will make em dirt cheap. Be ready to press the Nuke button!

starman's picture

The show must go on at any cost! To much at stake!

pebblewriter's picture

So strange to see USDJPY sell off and VIX spike a little at the close.  Thought for sure they'd ramp it up to SPX 1900.  Thanks, Meg for the reminder of what closes were like back when the "market" didn't need quotation marks.

Anyone following the descending triangle on the Nikkei?  Past top tags cost eminis 56 points on average.  And, no POMO tomorrow...