The VIX Seasonal Summer Slumber Is Over: It's All Uphill From Here

Tyler Durden's picture

When even the Fed is lamenting the VIX's summer doldrums, having recently printing at all time lows on an unadjusted basis, one knows that Kevin Henry's VIX selling skills will soon be obsolete. In fact he may even have to learn how to, gasp, buy VIX (with Citadel's help of course). But maybe he won't have to As FBN's JC O'Hara shows, one of the factors contributing to the record low VIX may not just be the global central banks' attempts at vol supression: it may be the seasons themselves.

As the chart below shows, every year vol tends to hit its lowest level, at least based purely on annual trading patterns, just around independence day. After that it goes in a straight line higher, until it hits its annual peak in the first half of October before it once again tumbles just in time for Christmas.

However, in a world in which the Fed has turned every pattern around on its head, does this even matter? Check back in three months to find out if, in yet another case of central-planning wreaking havoc with technicals, this time too is different.