The VIX dropped 25% yesterday. It was a nasty reversal, usually something we are accustomed to seeing right after a VIX spike. Oddly enough the VIX was performing out of the ordinary the last few weeks. The gains were holding. You could even make a case that the 'fear index' was consolidating!
The usual VIX smackdown was not occurring.
and then yesterday came, and along with it another dose of reality. The marker top callers are wrong yet again.
The French elections, coupled with Trump Tax cuts, and the price magnet removed after another monthly option expiration peg, ended up being the perfect ingredients to launch the Nasdaq to never seen before highs.
The S&P500 broke out of the wedge:
and now the VIX is setting up to revisit the sub 10 levels it briefly painted just a few months ago.
The VIX sits at 10.42 here pre-market.
and yet the entire government is on the brink of another shut down!
The Russians are flying bombers closer and closer to our shores. The North Koreans are ready to blow up our Navy and start World War III! There are plenty of reasons to sell. And yet the market continues to see buyers. Also, these supposed fear inducing headlines is sending the closely watched 'fear index' the VIX to 10+ year lows. What does the market know that the news channels don't?
The answer is the same as it's been since the lows in March 2009. This market remains on a path higher, World War III be damned.
A move under 10 for the VIX could be something more than just a quick paint like we saw in February. We could see 9.50 or 9 even??? Which means every other index under the sun is likely to hit new record highs, absent of course the fear index, which is on course to print new record lows. GO figure. Named reasons to sell the stock market turn into great buying opportunities.... where have we heard that before.....