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Is VIX Heading Back To 40 This Week?
For the first time since August 2008, high-yield bond 'VIX' is greater than US equity 'VIX'. The 1-month implied vol of HYG has surged over 21 - its highest since October 2011. The last time credit's volatility surged above stocks like this, VIX quickly accelerated well beyond 40, pricing in the increased business risk. Furthemore, just as we saw in July/August, the cost of protecting equity markets is beginning to accelerate up to the surging cost of protecting credit markets. Both credit levels and risk suggest VIX is going notably higher.
Deja vu all over again from August (note this is High yield bond option-adjusted spread as opposed to CDX as to avoid the roll dislocation). Equity markets ignored credit's risk just as they did in July and August... until they snapped...
Furthermore,For the first time since 2008, credit volatility is above equity vol.
The last time this happened, VIX rapidly exploded as credit market volatility increased business risk.
Charts: Bloomberg
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Seatbelts fastened, let's go. ZH called s&p 1800 over weekend so VIX 40 makes sense.
We all know what comes next.
Yellen lowers by .25%. Ben Bernanke's head explodes, SP500 at 2,500 by Christmas.
Fact.
Something is about to happen.
And it's pretty simple actually.
There are a shitload of shorts that have become profitable and as of wednesday, most of them will roll them over into the next 3 to 4 months.
So that will first cause a spike on wednesday followed by a possible dump. Unless they only roll them over by friday if yellen doens't confirm the rate hike.
The markets will keep going down for the next few months but the real bust will be 3 to 4 months from now.
And now, a lot more calls will be written making the next possible crash even a bigger problem.
the other day ES was down like 6 points but the VIX was up almost 6 points to 23.....i keep saying new record high on ES by EOY on relief rally.....then into EOQ1 will be sold.
Bear Porn Warning.
not gonna happen
It 3:30 ... now watch this ramp shot !
These bukkake flicks always end the same way.
Adjust your goggles and tighten the belts on your raincoats people...
Seatbelts firmly buckled. No take off yet. What's happenin'??
Goldman are about to make a few dollars.
About time my VIX calls did something
2016 sounds like a good year to introduce 100 year generational mortgages, an 10 year car loans!
Gotta get the how much a month crowd out consuming MOAR!
A 12-handle by New Year's Eve is more likely.
VIX and my UVXY are getting bitch slapped today!!
Vexing VIX may violently vault, visibly vascillate, or vomit voluminously.
More likely the HUI breaks 105 completing a H&S pattern targeting 70. Gold sub $900?
Hello? Have you met the Algos? VIX will go down faster than a crack whore jonesing.
But, but, but the Santa Claus rally. For Christ sake think of the kids. We need our million dollar bonuses to donate it to charity. Please Janet - think of the children.
Bought UVXY last year, lost 80%. Piece of shit ETF. VIX is manipulated. Don't be dumb. Don't buy this.
And UGAZ still has $342 million in AUM. Only 99.5% decay on that one.
Contango, dumbass. Never hold UVXY more than 8 weeks.
Better to have said "live & learn; do not hold such instruments more than 6-12 weeks". No need to act like an ass; we all are learning and learn best from our mistakes.
Yeah but I'm not a 1500s street urchin in Stratford-on-Avon. Dismissing something because you actively chose not to understand it is the pinnacle of dumbassery in my book.
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edit: doublepost
ZeroHedge had several articles this year & last about the fact that 90% of people or more loose on the VIX/VXX because of the NY FED consistent manipulations.
I found one of several, but this is sufficient.
"What Happens When You Run Out Of VIX To Short?"
http://www.zerohedge.com/news/2014-10-27/what-happens-when-you-run-out-v...
About the NY FED - Simon Potter's Hate-Hate Relationship With The VIX
http://www.zerohedge.com/news/2012-12-31/simon-potters-hate-hate-relatio...
Its a loser if nothing bad happens, I have lost too but it is only a matter of time. Besides, this should never be held long term unless you are OK with losing so you should only be using your casino cash for this.
The NY FED is in charge of the volatility and that is why the VXX did not jump past 30 today; went at or near 24 and that is too much given the week we are in. Just watch the Gold slamming because it coincides (with few exceptions) with the volatility and inverse to the market. Therefore if Gold spikes overnight and nothing happens at 8:30 (NY open) to bring it down then the markets are going higher.
If the PM's are spiked lower, then markets are going up and volatility down. (Few exceptions)
Based on what you said, if PMs spike either higher or lower, stocks are going up and volatility down....in other words, stocks are going up no matter what metals do?
Thanks for the correction; the last word on the first word should be replaced with the phrase "try to go lower"; not higher. Thanks.
CORRECTION
The NY FED is in charge of the volatility and that is why the VXX did not jump past 30 today; went at or near 24 and that is too much given the week we are in. Just watch the Gold slamming because it coincides (with few exceptions) with the volatility and inverse to the market. Therefore if Gold spikes overnight and nothing happens at 8:30 (NY open) to bring it down then the markets are going TO TRY TO GO LOWER.
If the PM's are spiked lower, then markets are going up and volatility down. (Few exceptions)
VIX heading to 40 like today was supposed to be a huge down day.....not.
The short answer would be NO
I got 99 problems but the VIX aint one.
In order to answer that question we would have to ask someone who meets at the Tower of Basel.
When the VIX hits 75 like back in 08, I'll quiver...until then...ZOOM TO THE MOON, ALICE.
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https://www.eff.org/
This time is different. >.>