Calm Before The Seasonal Storm - VIX Has Some Catching Up To Do

Tyler Durden's picture

The S&P 500 Index is due for many more swings like Wednesday’s in both directions, if the last 10 years history are any guide...

The volatility regime shifted dramatically since Trump was elected... are we due to go back to the old regime?

 

As Bloomberg notes, Wednesday was the fourth day this year in which the S&P 500 rose or fell more than 1 percent.

Similar moves occurred at least 38 times each year since 2009, when the bull market started. Among them were at least four fluctuations a year of more than 2 percent, a threshold not yet crossed in 2017.

Seasonals do not help..

But while the narrative for now is Trump's impeachment odds, we suspect there is far deeper issues, as we noted previously. The lagged response of the world's equity markets to Chinese liquidity is hard for even the most ignorant asset-gatherer to ignore - or argue causally.

And so that is it - the one chart that ties suppressed global equity volatility to the credit cycle in China - this will not end well.

China’s contribution to the broader global recovery may be waning. Further legs to the global reflation theme may now rely even more so on the Trump administration’s ability to deliver on key campaign promises, and gioven this week's debacles, those seem less likely than ever.

And the bottom line is simple - and even if China folds on its monetary tightening path, the next phase of volatility is baked into the cake.

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knukles's picture

As long as I have my daily plasma I'll be fine.

Keyser's picture

"These are not the droids you are looking for"

Today, the VIX is nothing but a tool for the algos, as they are all programmed to react to moves in the VIX... You want to juice the indexes, then stomp on the VIX and bid USDJPY... I remember a time when being a successful investor required more than BTFD...

zzzz88's picture

investigate who are behind all these manipulations!

CowboyzFan's picture

Like the way you think, but I doubt anyone's gonna step up and investigate the central wankers who are pulling this shit.

pebblewriter's picture

If you like the seasonality angle, you'll love the cyclical.  This spike in VIX (which might not be over) was exactly what the charts indicated several weeks ago.

http://pebblewriter.com/its-war/

Russdiamon's picture

It seems like we are due for some moves. I use this guys timing of reversals to help me out. Definitely should check him out. It has made a big difference for me.

Check this out


Traderone's picture

I live for swings like we had today and yesterday in the ES.

OrdleOccupando's picture

Except the last 10 years aren't any guide. There are no guides.

hola dos cola's picture

Was oil pumped to prop up the S&P500 to cool down the VIX and avoid further mayhem today?

DEMIZEN's picture

maybe the whole thing is just out of control and damage control team overshoots their estimates. this doesnt make any sense. there is no quant in the world that can explain this shit without being laughed at.

hola dos cola's picture

Let's make the best of it then. Oil will plunge.

Cordeezy's picture

The Trader 50 cent has a lot of calls placed on the Vix can't be wrong with a name like that

www.escapeamazon.com

Russdiamon's picture

It seems like we are due for some moves. I use this guys timing of reversals to help me out. Definitely should check him out. It has made a big difference for me.

Check this Out