The S&P Has Closed At New Record Highs 37 Times In 2017, The Most In 20 Years

In a testament to the "buy the dip" mentality, or rather only remaining investing strategy in quasi-nationalized capital markets, BofA reports that the S&P 500 has closed at a new record high 37 times so far during 2017, the most in the Q1 to Q3 period since 1997, when the S&P closed at a new record 40 times before the start of Q4 (the most occurred in 1995 when there were 61 record closes).

Additionally, 2017 still has the potential to top ’97 (40 records) as four trading days still remain in Q3, and judging by today's strong rebound we just may go for 38 by end of day. As BofA's Benjamin Bowler writes, "this high number of record closes further depicts how US stocks have continuously grinded higher as investors continue to buy every dip and keep volatility suppressed."

It's not just the cash market however: another record was just observed in the VIX, which as we reported over the weekend, just saw the lowest September level on record.

As BofA notes, despite NK, storms, and the Fed, the VIX has remained unusually low in Sep Shrugging off rising geopolitical tension with North Korea, several destructive storms, and the Fed’s plan to normalize its balance sheet, the VIX remained heavily subdued during September, defying seasonal trends. The average VIX close in September month-to-date is currently 10.60, which is the lowest average September on record. 

What’s more, the 10.60 average close is actually lower than the minimum levels seen in any prior September (before this year, the lowest min was 11.10 in Sep-95).

Perhaps even more notable is the Sep-17 VIX settlement, which was 9.87. This is the lowest monthly settlement on record and only the second sub-10 monthly settlement (the other was in Feb-07 when the VIX settlement was 9.95). Even more striking, monthly settlements are typically high in September as the average settlement during September since 2004 is 19.69, the fifth highest relative to other months.

PUtting the VIX performance in context, comparing 2017 monthly VIX settlements to historical norms, this month’s 9.87 print was the farthest below the mean.

The question, naturally, is how much longer can central banks keep volatility suppressed to such record-breaking levels?