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"We Have Nothing To Fear But The Lack Of Fear Itself"

Tyler Durden's picture




 

"It's a record!" No not the S&P 500 - the total and utter lack of fear in the marketplace... Adding up Bearish AAII professionals, those who believe a Correction is coming, and the VIX; we have never (ever) been more complacent about stocks. Seems like the Fed's communications policy (about complacency being a concern) is not working...

 

 

"We have nothing to fear but the lack of fear itself"

 

h/t @Not_Jim_Cramer

 

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Thu, 06/05/2014 - 15:53 | 4827808 slaughterer
slaughterer's picture

Meh, who cares about complacency, I am happy with the market.  /sarc

Thu, 06/05/2014 - 15:53 | 4827815 wallstreetapost...
wallstreetaposteriori's picture

No sarc needed...  fuck it....what could go wrong?

Thu, 06/05/2014 - 16:04 | 4827860 Henry Rearden
Henry Rearden's picture

The VIX is a calculation of volatility.  If the stock market moves 15 points each day, then that move means a lot more if the market is trading at a lower price than if it is trading at a higher one.  The same price move of 15 points when the index is valued at 1500 is a higher volatility than if the market is trading 1940.  The market is moving in the same intervals, but because the price of the index is higher the volatility is lower. 

This fact seems to be omitted everytime ZeroHedge talks about the VIX. 

Thu, 06/05/2014 - 16:11 | 4827893 Spitzer
Spitzer's picture

What about the survey ?

We can feel it that there is no voletility. No vix needed

Thu, 06/05/2014 - 19:58 | 4828533 TheRedScourge
TheRedScourge's picture

Depends if they've "seasonally adjusted" the survey results or not I suppose.

Thu, 06/05/2014 - 16:17 | 4827917 asierguti
asierguti's picture

Really? Take a second look, please.

 

VIX and SP500 are correlated 80% historically. This means that if stocks go down, VIX goes up. Simple.

 

Why is that? VIX is calculated with options' implied volatility. According to the formula, if the stock goes down, it counts as more risky, and therefore the option is more volatile. That's why you have almost 80% correlation, and that's why it's called the fear index.

 

http://www.cboe.com/micro/vix/vixwhite.pdf

Thu, 06/05/2014 - 16:37 | 4827968 Henry Rearden
Henry Rearden's picture

That's also true.  But like most equations that use stocastic calculus (as the one for pricing options does) there are a multitude of inputs that can change the output of the equation.  You are stating the obvious one that most people understand, and is mentioned in the brochure the CBOE circulates.  I actually traded in the SPX CBOE pit and priced options for a living, and am telling you there is more to the VIX than just the stock market going up or down. 

 

As far as the survey, yeah, that scares me as an investor because the masses are generally not correct. 

Thu, 06/05/2014 - 16:42 | 4827993 wallstreetapost...
wallstreetaposteriori's picture

I feel an Ito's Lemma coming on.... LOL.

Thu, 06/05/2014 - 19:43 | 4828499 new game
new game's picture

ah, but has the market ever been this manipulated. i suggest a manipulation index(mix), which would be very high right now, hockey stick to the moon trajectory...

Thu, 06/05/2014 - 15:52 | 4827812 slaughterer
slaughterer's picture

Please nobody else say "blow off top" for today and then jinx it.

Thu, 06/05/2014 - 16:00 | 4827846 NoDebt
NoDebt's picture

I just did in another thread.  Sorry.  Was that bad?

Thu, 06/05/2014 - 15:56 | 4827826 maskone909
maskone909's picture

freedom isnt free..

it costs folks like you and me...

and if you dont chip in your buck-o-five, who will?

freedom costs a buck-o-five

Thu, 06/05/2014 - 16:02 | 4827850 NoDebt
NoDebt's picture

In Philadelphia, it's worth fifty bucks.

Fine, I'll take it.  Say.... how much for the gun?

Thu, 06/05/2014 - 16:21 | 4827928 John Law Lives
John Law Lives's picture

Nice 'Trading Places' plug.

Thu, 06/05/2014 - 15:57 | 4827834 ebworthen
ebworthen's picture

If the Central Banks would just deposit $100,000/month in all our banks accounts then do a NIRP of 5% this market can go to the moon, employment will recover, along with car, home, and retail sales.  Endless liquidity and prosperity.

Thu, 06/05/2014 - 16:02 | 4827852 maskone909
maskone909's picture

sounds about right considering there is what, 300 million peeps in usa?  17 trillion plus in bailouts?  yeah close to 100K per person

Thu, 06/05/2014 - 16:03 | 4827855 NoDebt
NoDebt's picture

Please stop giving them more stupid ideas.  They have plenty of their own already.

Thu, 06/05/2014 - 16:11 | 4827894 ebworthen
ebworthen's picture

It's a great idea.  They should have started with this.  Then they wouldn't have had to bailout any corporations/banks/insurers and...oh wait...

Thu, 06/05/2014 - 16:05 | 4827863 I Write Code
I Write Code's picture

The VIX is not at this point a valid indicator, it is being managed by the Fed.

I keep looking at individual stock charts and cannot imagine how they are *not* managed, it is apparently being done to that level, not just the Dow 30 or the S&P 500, either.

Thu, 06/05/2014 - 16:52 | 4828024 Groundhog Day
Groundhog Day's picture

the worlds fastest computers can do trillions of calculations/ sec.  how many idiots are their like us staring at the screen thinking we are actually trading/buying/selling.  We are in the matrix.  It is designed to take all our money and in due time it will, no matter if your long short or sideways.

Thu, 06/05/2014 - 19:10 | 4828404 I Write Code
I Write Code's picture

It remains to be seen.  So far, Bernanke's public exhortations in 2008 to Buy All Stocks worked for anyone who followed it.  In case of hyperinflation it may work again.

Or it could crash to negative at midnight tonight.  If you discount for that risk, well, that's nasty.

Thu, 06/05/2014 - 16:14 | 4827909 Frank N. Beans
Frank N. Beans's picture

so this is reverse capitulation, but with no reason to sell due to Fed

 

Thu, 06/05/2014 - 16:17 | 4827918 savedeposit
savedeposit's picture

The poor have nothing te fear and nothing to loooose , only the rich period !

Thu, 06/05/2014 - 17:01 | 4828044 Jugdish787
Jugdish787's picture

i don't usually vote...but i had to downvote both of your posts.  A double post that doesnt make a lot of sense and has a typo...its ONE fucking line!!

 

Thu, 06/05/2014 - 16:17 | 4827919 savedeposit
savedeposit's picture

The poor have nothing te fear and nothing to loooose , only the rich period !

Thu, 06/05/2014 - 16:21 | 4827932 Freewheelin Franklin
Freewheelin Franklin's picture

The S&P can never go down. It might slow down a little, maybe a little correction but it will never go down. You know, just like housing prices could never go down. 

Thu, 06/05/2014 - 16:42 | 4827990 spastic_colon
spastic_colon's picture

"we have reached a permanently high plateau" - some old dead dude

Thu, 06/05/2014 - 16:40 | 4827985 Itchy and Scratchy
Itchy and Scratchy's picture

I'll only care when the VIX goes negative!

Thu, 06/05/2014 - 16:58 | 4828036 Chuck Knoblauch
Chuck Knoblauch's picture

I'm going to enjoy the screaming on ZH when this Turkey realizes it's Thanksgiving Day.

Thu, 06/05/2014 - 17:16 | 4828097 limacon
limacon's picture

Those who do not fear history are doomed to repeat it.

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