At the start of September last year, [7] as stocks began to ramp aggressively off the Black Monday crash lows, we unveiled a rather discomforting "decoupling" that suggested strongly "don't believe the hype."
Specifically, on August 30 we said that of all trades out there, the XIV-S&P convergence trade is as close to a "no brainer" as it gets:
XIV - ES: "no brainer" pair trade of the week pic.twitter.com/sAIanK2gMW [8]
— zerohedge (@zerohedge) August 30, 2015 [9]
Four months later, and able to remain strongly convicted of the trade, the inverse VIX ETF (XIV) and the S&P 500 ETF (SPY) have recoupled back at the lows from August 24th. We await the recoupling of equity exuberance to credit curmudgeon-ness...
September... [7]
And now - equities have collapsed back to the VIX complex's reality...
[10]
Time to exit.
* * *
What next?
[11]
Because VIX has a lonmg way to go too!
[12]
Trade Accordingly.
