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The Last Minute VIX Murder

Tyler Durden's picture




 

This...

 

 

And then this just happened... The lowest VIX close since Feb 2007

 

Close up...

 

And how does he do it? Through massive VXX selling in dark pools...

Is someone (cough Fed via Citadel) using dark pools to manage their volatility suppression - which implicitly spooks the actual markets in implied vol and thus in a "tail wags the dog" manner, juices the entire US equity market... but we do not find out about it until after hours as the dark pool unleashes its volume at VWAP pricing...

 

Makes us wonder if this is the fingerprints of the NY Fed's Kevin Henry hard at work managing perceptions via dark pools with as much leverage as possible via the vol markets.

just like he did here the week of The Fed Minutes

 

As he did this week...

 

Did The Fed just lose control?

 

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Fri, 06/06/2014 - 16:28 | 4831185 dontgoforit
dontgoforit's picture

Oh the webs they weave!

Fri, 06/06/2014 - 16:29 | 4831191 Say What Again
Say What Again's picture

What does this say about the real market valuations, if they have to work that hard to keep the prices elevated?

Fri, 06/06/2014 - 16:34 | 4831209 ZeroPower
ZeroPower's picture

Repeat after me - sell vol into the weekends. A no brainer.

Fri, 06/06/2014 - 16:44 | 4831234 AccreditedEYE
AccreditedEYE's picture

Exactly. How do you fight an enemy with unlimited ammo? You don't, bitchez.

Fri, 06/06/2014 - 16:47 | 4831244 max2205
max2205's picture

Yes. AH

Fri, 06/06/2014 - 17:48 | 4831388 NoDebt
NoDebt's picture

".... And nobody goes to jail."

Fri, 06/06/2014 - 18:27 | 4831450 Say What Again
Say What Again's picture

If you're not already at happy hour yet...

Check out the AH volume on 5/21 & 5/23

Trade size equal 27,000 & 33,000!!!

Fri, 06/06/2014 - 22:14 | 4831811 flacon
flacon's picture

How come this massive volume spike did not affect the price of VXX? Shouldn't this amout of buying or selling move the bid/ask stack?

Sat, 06/07/2014 - 09:26 | 4832249 markmotive
markmotive's picture

Bottom line is the trend since 2009 for volatility is down.

http://www.planbeconomics.com/2013/04/vix-bumping-along-bottom.html

Fri, 06/06/2014 - 17:29 | 4831357 john39
john39's picture

you leave the casino.  and spread the word.

Sat, 06/07/2014 - 07:26 | 4832170 asierguti
asierguti's picture

If it's obvious, it's obviously wrong.  - Joseph E. Granville

 

The obvious rarely happens, the unexpected constantly occurs. - Jesse Livermore

Fri, 06/06/2014 - 16:31 | 4831196 zorba THE GREEK
zorba THE GREEK's picture

If someone doesn't know that all markets are rigged, it's because they don't want to know.

Sat, 06/07/2014 - 14:24 | 4832792 SheepDog-One
SheepDog-One's picture

'Did the Fed just lose control'?
Well I guess we can hope, but I'm not holding my breath.

Fri, 06/06/2014 - 16:28 | 4831186 zorba THE GREEK
zorba THE GREEK's picture

Today, everything is rigged.

Fri, 06/06/2014 - 16:48 | 4831252 max2205
max2205's picture

Why is the question.....is a hedge fund under water?

Fri, 06/06/2014 - 17:48 | 4831391 NoDebt
NoDebt's picture

Yes.  The largest one in the world.

Fri, 06/06/2014 - 16:54 | 4831267 Bingo Hammer
Bingo Hammer's picture

When you think about it everything has always been rigged

Fri, 06/06/2014 - 17:19 | 4831334 walküre
walküre's picture

Yes, but the firepower of algos and digital leverage / debt / money is a whole new dimension.

Soon people will learn that winning at the NY casinos is like winning at Monopoly. It sure feels great but it doesn't buy you anything in real life.

I promise you that the value a.k.a. perception of their money is going to the dogs. If you want real stuff, you better buy it now because soon there won't be a seller interested in the monopoly money.

Fri, 06/06/2014 - 16:28 | 4831187 101 years and c...
101 years and counting's picture

its legal because......

Fri, 06/06/2014 - 16:31 | 4831200 Say What Again
Say What Again's picture

...  its legal because the O-Bomber can sign an executive-order to do whatever he damn well wants to do.  He is King of the World

Fri, 06/06/2014 - 16:32 | 4831205 Oldwood
Oldwood's picture

Certain people make money from it?

Fri, 06/06/2014 - 17:47 | 4831385 SDShack
SDShack's picture

it's legal because....0bama!

Fri, 06/06/2014 - 16:33 | 4831207 Squid Viscous
Squid Viscous's picture

"Who needs the Vix when everything is Fixed?"

Fri, 06/06/2014 - 16:39 | 4831211 Number 156
Number 156's picture

This is why it makes no difference what any of the market indices are. Who cares what the DOW or S&P are.
The entire system is really a con-game. Who could forget the latest fiasco with the ISM data?
Clueless investors see these markets going up and up, and feel they're missing the bandwagon. with their confidence won, they throw their money in.
Boy, just wait until this all unwinds. The fundamentals tell a different story.

Fri, 06/06/2014 - 16:37 | 4831213 Rainman
Rainman's picture

Master Henry is testing the outer limits of the Patriot Act , I see. He will have lifetime job security ... because this will go on forever  < or at least until it doesn't work no mo >.

Nobody knows fair market value of any asset class. Why should stawks be different...? Buy any dip in anything if you ever see one again ! 

Fri, 06/06/2014 - 16:42 | 4831228 luna_man
luna_man's picture

 

 

I might be losin, but have not stopped believin...

 

CRIMINALS, shoot your best shot...still waiting!

Fri, 06/06/2014 - 16:44 | 4831233 Tsar Pointless
Tsar Pointless's picture

S&P 2000 by Flag Day. S&P 2100 by National Nude Day on July 14. S&P 2200 by August 17, National Thriftshop Day. S&P 2300 by my birthday, September 21.

After that, it's anybody's guess.

Fri, 06/06/2014 - 16:44 | 4831235 hegemony
hegemony's picture

Not bad for a non POMO day. I've traded for many years and today trading was like the day after thanksgiving. I don't mind losing usually, as it's part of the job and I'm not Virtu financial hence I actually have down days. Today, however, I'm pissed mostly at myself for sitting here all day getting my ass pounded but my god what a friggen joke this was. I'm almost speechless but hey I get to wake up and do this shit again on monday.

Fri, 06/06/2014 - 16:49 | 4831257 max2205
max2205's picture

Amen brother

Fri, 06/06/2014 - 16:45 | 4831236 debtor of last ...
debtor of last resort's picture

Ahhh, everything is vixed. Have a nice weekend bitchez. And remember, nothing is what it seems

We all passed Checkpoint Charlie. And there's no way back. Oh wait, there is, pulling your funds AND your fingernails at the same time

Volunteers?

Fri, 06/06/2014 - 16:45 | 4831240 danimal
danimal's picture

Perhaps you could explain how vxx moves the vix? I say it doesn't , the vix is a statistic. VXX is vix FUTURES. You move the Vix by trading options. My guess is you are seeing a vxx futures arb. I suppose you could move the vix if u wanted to, but why? The vix doesn't move the market the market moves the vix. Not everything is a conspiracy to move markets.

Fri, 06/06/2014 - 16:48 | 4831245 Tsar Pointless
Tsar Pointless's picture

Maybe not everything, but a lot of things.

Fri, 06/06/2014 - 20:18 | 4831635 FieldingMellish
FieldingMellish's picture

Market only affects spot VIX. If you move the futures curve (suppress it by selling VXX), you influence (by managing future expectations) the driver of spot, the S&P500. Tail wags dog.

Having said that, you could be correct in that its simply an arb play.

Fri, 06/06/2014 - 16:54 | 4831269 jubber
jubber's picture

Huge move up AH for all European Indexes as well can't even be bothered anymore to post them

Fri, 06/06/2014 - 16:56 | 4831271 valley chick
valley chick's picture

Good call Tylers!  Job well done!

Fri, 06/06/2014 - 17:01 | 4831291 oklaboy
oklaboy's picture

ditto that

Fri, 06/06/2014 - 17:11 | 4831308 ebworthen
ebworthen's picture

The equities market is a 70 year old on Cialis and testosterone gel.

You're betting that he won't have a heart attack and die in the saddle like Nelson Rockefeller.

Fri, 06/06/2014 - 17:23 | 4831342 walküre
walküre's picture

It's the old geezers last ditch attempt to do something meaningful. It's their last shot at greatness. A few years and they're all dead. What comes next is none of their concern.

Have you noticed how each new generation is more pissed and less optimistic than the last? How long can that go on for before a whole group of someones somewhere snaps?

Sat, 06/07/2014 - 00:09 | 4831961 Bananamerican
Bananamerican's picture

Seems like there's a new campus/workplace shooting every other day in Amerika...
I'd say quite a few people are "snapping" already

Fri, 06/06/2014 - 17:10 | 4831315 delivered
delivered's picture

Comfort breeds complacency. Complacency leads to letting your guard down (or in this case, dropping your pants). And when you let your guard down or drop your pants, you're just inviting a good old fashion getting bent over the rail fucking that you have nobody else to blame but yourself. But one word of advice, bring some nice flavored lubricants to help ease the pain of the entry and exit. Because given the size of the US's debt load (and world for that matter), the Fed's BS (that is balance sheet or if you like, bull shit), and the world's credit problems (think China unsecured debt), this one's gonna hurt. Until of course the world's CBs print $25 trillion next time around to attempt one more time to provide the ultimate happy ending. Unfortunately, you might have to pick between H. Clinton or A. Merkel being in charge of the happy ending, not a pleasant visualization at all!

Fri, 06/06/2014 - 17:18 | 4831331 DerdyBulls
DerdyBulls's picture

In the marines they'd call the securities market today a huge "chicken shit operation." I fail to see why anyone not complicit in this fraud participates.  

Fri, 06/06/2014 - 17:26 | 4831351 NOTaREALmerican
NOTaREALmerican's picture

Picked a bad week to stop sniffing VIX. 

Fri, 06/06/2014 - 17:41 | 4831377 silverserfer
silverserfer's picture

The sheep must not be spooked until they get to the slaughterhouse. 

Fri, 06/06/2014 - 17:54 | 4831400 MrTouchdown
MrTouchdown's picture

Here's the song that K-Hen plays while he kills the VIX:

 

https://www.youtube.com/watch?v=lZNUAdiVgkY

Fri, 06/06/2014 - 18:03 | 4831412 firstdivision
firstdivision's picture

I'm riding a long position to Monday. All I lose are worthless pieces of toilet paper

Fri, 06/06/2014 - 23:14 | 4831888 ricky663
ricky663's picture

FRNs (and other currencies) are not worthless, at least for now.
I use mine to buy food, wine, beer, diesel, golf rounds, electricity and internet, mobile phone, etc.

It is not that complicated guys. Sell slowly descending graphs, buy slowly ascending graphs. Exit at the "money shot." Leverage if you are so inclined.

Do so until the Black Swan arrives.

Fri, 06/06/2014 - 19:01 | 4831496 TeethVillage88s
TeethVillage88s's picture

Stockcharts do a great job, too bad I suck at investing.

I hear if an Economist is good he makes himself rich. Guess I should read more ZH!!!

Fri, 06/06/2014 - 20:31 | 4831658 ricky663
ricky663's picture

I exited TVIX about 3 weeks ago... It just wasn't working.
Holding long VIX positions has been suicide. Kinda reminds me of being long PMs last year.
You guys might get lucky and get a bounce, but why not stand aside for awhile? After all, you have forever (well, the rest of your life anyway) to trade the markets.
Good Luck and Happy Trading!

Fri, 06/06/2014 - 23:59 | 4831949 Turin Turambar
Turin Turambar's picture

The only profitable way to play TVIX the last few years is short.

Fri, 06/06/2014 - 21:35 | 4831749 Gamma735
Gamma735's picture

So I need to be short the VIX?

Fri, 06/06/2014 - 22:03 | 4831792 highwaytoserfdom
highwaytoserfdom's picture

i'm going to China to try their one aircraft carrier... It a casino you know. 

Floating-Casino Bid Turned Into China’s Biggest Aircraft Carrier Purchase

I kinda like Putin and China over IMF FED...     Man what a Hobsons choice..   or a South  Park  put it a Turd sandwich or a Douche bag.

https://www.youtube.com/watch?v=UthMHjoNyjA

 

Fri, 06/06/2014 - 22:21 | 4831827 El Hosel
El Hosel's picture

Vix slam  - Federallies serving up Zero Risk for the Bulltards , Banksters, and Oligarchs... Bitchez.

Also, see  - Federally reserving "Rhino Horns" for the Bears, Savers, and Reality seekers... Bitchez

Sat, 06/07/2014 - 00:01 | 4831953 q99x2
q99x2's picture

Can we move in and arrest them now please.

Sat, 06/07/2014 - 07:13 | 4832166 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Don't forget about the Boyz of Japan, BoJ ...

They got existential shite goin on post fuku ... and now China islands etc.

----------------------------------------------

In other words, when you sell JPY and buy $, if it was a "carry" the $ would go into fixed income w/ low volatility and a higher return than the payment required in the funding currency JPY. It's a loan in yen invested in $ securities.

But if you have unlimited pockets (printing press), you could sell JPY anytime. If you buy SPY or R2K for example (BoJ can buy ETFs etc.) AND then AT THE SAME TIME kill vol by selling vol futures (and take the sales proceeds and buy MOAR SPY leveraging your leverage etc.) then it would make sense how the Yen and P 500 are so highly correlated. But this is not a "carry" because you have too much vol in equities ... unless you kill the vol ...

Oh yeah, maybe it's just all big players on Wall Street doing it at the same time cuz it's a good idea. You definitely get others jumping on bandwagon imitating. But you still need a player of VERY LARGE SIZE initiating and "nudging" the markets.

Sat, 06/07/2014 - 07:16 | 4832168 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

You know they're doing it. The question has always been, how, exactly.

And now the Imperial minion, Stan the Man, emminence grise, is the Vader behind the Ewok.

Sat, 06/07/2014 - 07:44 | 4832178 disabledvet
disabledvet's picture

To me it's as simple as nuking the dollar.  The irony that this is driving down Treasury yields is unfortunately even more terrifying.

Total annihilation of incomes and standards of living.

No one even cares about how the bill is in fact being paid.

The only clear fact is that credit is being extended into only the financial economy.

Sat, 06/07/2014 - 08:35 | 4832209 buzzsaw99
buzzsaw99's picture

VXX buyers got nothing bitchez. They buy, but have zero intention of selling anything in size EVER. The same way with shorts, the only thing they have to sell is someone else's borrowed securities. Never go full retard.

Sat, 06/07/2014 - 11:44 | 4832403 Rusty_Shackleford
Rusty_Shackleford's picture

There is no spoon......

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