This page has been archived and commenting is disabled.
Complacency Reigns Supreme - "Nothing Can Possibly Go Wrong", Right
Submitted by Charles Hugh Smith from Of Two Minds
Complacency Reigns Supreme--Nothing Can Possibly Go Wrong, Right?
One of the more remarkable features of the Bull market in stocks is the ascendancy of complacency and the banishing of fear. Take a look at this chart of the "fear index," the VIX--more properly, a measure of volatility:
The VIX popping up to 17 from 12 now qualifies as an extreme of fear which gives the Bulls the go-ahead to buy the dip once again.
Even more striking is the daily chart of VXX, a short-term VIX-based etn: A tiny blip up from 24 to 26 now qualifies as an extreme of panic.
Equally remarkable is the steady decline in both VIX and VXX: complacency now reigns supreme.
The complacency is the result of stocks' steady rise for over two years--9 quarters of advances with only one spike down in october 2014--a spot of bother that was quickly reversed by a Federal Reserve flunky talking up QE4 (another round of quantitative easing to boost stocks).
No wonder complacency reigns supreme: any time the stock market tumbles by more than 3%, a Federal Reserve flack runs to a microphone and starts talking about how the Fed stands ready to launch QE4 or "whatever it takes" to push stocks back into rally mode.
For context, recall that both VIX and VXX tend to reach 40 in real moments of panic/fear. That the VXX "soaring" 2 points from 24 to 26 now qualifies as an extreme of fear is absurd.
Yet this is the logical result of central banks constantly "saving" equities every time they swoon the slightest bit: traders and punters know that the Fed making reassuring sounds is all that's needed to reverse any decline and restart the Bull advance.
But a couple of things have changed recently. The QE baton has been passed from the Fed to the European Central Bank (ECB), famously ready to do "whatever it takes," but the ECB's QE bond-buying hasn't triggered the global rally that many expected.
Secondly, China is rolling over the first time in six years. The engines that pulled the global economy out of the hole in 2009--the Federal Reserve and China--have stopped, and there are no equivalent engines warming up.
So by all means, buy the dip now that the VIX soared in full-blown panic from 12 to 17. Nothing can possibly go wrong as long as a Fed flack stands ready to spew the same old assurances of "whatever it takes" into a microphone.
»
- 14782 reads
- Printer-friendly version
- Send to friend
- advertisements -
Silly man. VXX was over 6000 in 2009. You can't use VXX as a metric because of roll.
UVXY the VIX x2 opened for trading Oct 2011..split-adgusted @ 70,600.00+ now about 15
this is where the lazy ''in the know'' few have been playing, plus they have Options...imagine a rolling, constant bunch of PUTS over the past 3.5 years since inception
( the Splits would result in having 2,400 shares for each ONE share bought at the start, a 1-6, 1-10, 1-10, 1-4 Reverse Spilts )
It's not the end of the world till it is the end of the world.
And when it is the end of the worls, it doesn't matter anyways.
VC: 2003 ;-)
The Ponzi scheme that is the US economy must be maintained. Or the debt of $18.16 trillion and unfunded liabilities of over $150 trillion will crush the US economy.
https://www.youtube.com/watch?v=68V1-2OGeYw
Doesn't Charles Hugh Smith realize that VXX is a constantly decaying ETF and can't be used for technical analysis?
Buying options on VXX is buying a derivative of a derivative of a derivative of the S&P. Just imagine the decay. Also, puts on VXX have strong decay too, so just watch out with this ETF. Best to trade it for a day or two and get out.
Take a look at 5 year VXX:
http://scharts.co/1Dg3iph
"Stawk prices never drop," my realtor told me.
[unless you own an O&G stawk or driller or miner or any other commodity stawk or commodity related]
for those who SHORTed of course
the most recent lazy 'in the know' play has been the x2 SHORT OIL
Once control of the Red Sea and Straight of Homes fall into West's control.....Iran is cut off.
Look at that map again brother.
East and north.
This is what Gerald Celente said about the vix.....
https://www.youtube.com/watch?v=qBCUCJNWimo
Silver seems like a good buy right now.
Good buy? or "Good bye"?
The Fed knows that the stock market generated wealth is the major support of the US economy since the financial crisis of 2008. So the Fed will do everything to keep the stock market moving higher - talk, more talk, more QE, and if needed, like Japan, outright purchases of equities.
The Ponzi scheme that is the US economy must be maintained. Or the debt of $18.16 trillion and unfunded liabilities of over $150 trillion will crush the US economy. That works out to at least $1,378,000 per each of the 122 million taxpayers in USA. Reality is a harsh mistress and must be avoided at all costs.
"No Rate Normalization During My Lifetime" BernankeThe FED as well as the rest of the cabal know that if they let their manipulated stock markets sink, they will soon have pitchforks following them.
In other words, for them to retain their god like above the law above an audit fiat printing press power over all of humanity, they have to keep the stock markets up to keep their sponsors happy.
"Reality is a harsh mistress and must be avoided at all costs."
So she likes is rough, eh...?
Yep. Pinko Fascist Commie Bastards are in control. Pity them who worship at their feet (Nigtards). When the jig is up these fools will be begging to spare their conformist traitor lives. Ha. fat chance...
Actually anything real not paper looks like a pretty good buy at this time.
Agreed. I wonder about property, though. I guess anything tangible that can be taxed, actually. Governments (fed/state/local) can, will, and do increase taxes on the tangible asset until you can't afford to pay said taxes. At that point, in a display of compassion (they are compassionate leftists, you know - they **own** compassion) they take it from you, throw you out on the street, and sell it to get their money. Look at property taxes in most leftist dominated areas. They are so high that many can not afford to retire in their lifelong homes.
It's all one big racket. IMF, the UN, Soros, US.gov, uncle Warren, Big Sis. All allowed to exist and manipulate thanks to fiat. I hope bitcoin comes through and sets things straight monetarywise. Bring back accountability to finance, and by extension politics.
They own it all. Good luck unwinding!
The "system" has been slowly... very slowly devouring itself for decades now. Funny thing about old age, the older you get the faster time flies!
The dollars demise/death is right in front of our eyes, but clingers cling.
You don't just create asset bubbles. The boom/bust cycle was quite common back in the day. And has been again going on thirty years now.
Bad way to finance a Government though which is why the Fed was created.
Appears to have turned on its master now....
I'd love to 'invest' in some stawks ... but my dough is all tied up in AAA+++ equities like MF Global.
VIX is a joke
I'm too complacent to think about this.
That's why America has a one party system (Demopublican and Republocrat) to ensure the destruction of all slaves
Thesis – Antithesis – Synthesis…Kansas Politicians Call For Changing the Constitution
Russian Bank Hires Two Former U.S. Senators
Everyone and Everything is complacent, even inanimate objects. For example, the Air Canada plane that crash landed in Halifax last night after one of the wings fell off when the plane hit a powerline on descent. That airplane was far too complacent in its landing and should have taken lessons from the 9/11 planes. As we know, those airplane wings cut through the concrete and steel building frames of the twin towers. With respect to the Pentagon, they also knocked over several light stands without the wings breaking off and had the decency of folding up and disappearing into the Pentagon without breaking off. And of course Shanksville airplane wings took the proactive steps of "vaporizing".
We can do amazing things when we're not complacent.
.
It's all going according to plan.
The JOKER says buy stocks and bonds.
Will the people in America actually realize that short term pain is necessary to solve the financial trajectory of the country?
Will politicians realize the error in the ways of the past and implement change?
Answer: No and No. The US is hooked on entitlements. Pain is not acceptable. Politicians want to stay in office, they don't give a rats ass about the future of the country. The only thing that counts is "their party."
Conclusion: Sometime within the next 10 years, the entire burrito goes over the waterfall. We can talk all we want about the problems but in reality there is no stomach for a self enforced reduction in the American standard of living. The band-aid will be ripped off, the US and just about every country on the globe will come to realize that adding debt (i.e. QE) was the wrong choice.
And now from the Dos Equis commercial: "Stay liquid my friends............."
All your VIX are belong to us...
Time for Tyler to repost that great article about the 'VIX' put up some months ago...
Put down the chart-porn Charles and grab that guitar, because that's about all you or any other slave to this charade can call real at this late stage.
So if the baton is being passed from the US Fed to the EU ECB then it gets passed to the Chinese, does it then go on back to the beginning again? Recycle.... With the Japs playings as roavers?
""Stawk prices never drop," my realtor told me."
Some of the newest generation kids are starting to believe this.
They haven't experienced a bear market. It's like a thing of the past.
If the Federal Reserve owns all the stocks, like the bank of Japan is trying to do, just keep front-running the Fed.
Good time for companies to start issuing more stocks and IPOs if the central banks are buying.
Unlimited printing and buying of stocks should be met with met with unlimited IPOs and stock issuance to transfer Fed money directly to corporation.
What country deserves more condemnation for violating human rights than any other nation on earth? According to the U.N.’s top human rights body, that would be Israel.
Good to know that you get your facts from the highly-credible UN.
I would not agree that nothing can go wrong. Rising stock prices push dividend yields towards zero. I don't know how a world will function without any positive yield from bonds and stocks. Other segments get contaminated such as real estate and suddenly we live in no yield world.
All pension plans and insurance fail in a no-yield world.
They are wholly dependent on the premise that money has time value (ie - earns interest). With ZIRP, pension payouts = contributins - overhead and insurance claim payments = premiums - overhead.
Spot on article.