Peak Complacency (Again)

As stocks have risen in recent weeks on the biggest short-squeeze in 7 years, so VIX - the expected volatility of the market - has dropped to 2016 lows. However, with VIX at around 20, remains almost double the peak-QE-suppression lows of July 2014. Complacency is peaking though as VVIX - the expected volatility of VIX - has collapsed to its post-QE lows and erased all fear since before China's August 2015 devaluation.

It seems the VIX complex is pricing in some "easing" (in other words "vol suppression") soon...

 

Is the VIX derivative market expecting more QE? Unlikely. But NIRP maybe... as bets on The Fed going negative soar to record highs...

 

Charts: Bloomberg