Friday 3 May 2013

Volatility back in the 12s

With the Dow, SP, and R2K closing the week at new historic highs, the VIX naturally slipped lower, -5.45% @ 12.85. Similarly, across the week, the VIX declined by 5.6%. VIX remains at utterly complacent levels, but then..the Fed is still throwing 85bn a month at the US markets.


VIX'60min



VIX'daily



VIX'weekly


Summary

Suffice to say, VIX back in the 12s represents a market that is entirely fearless. It is a market that knows the QE-POMO is very likely to continue for at least another 3-6 months.

Of course, if that drip feed of free money comes to an end, this market is going to unravel rather quickly.
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In the meantime, it now seems unlikely that we'll be seeing VIX break into the 20s. Indeed, if the indexes merely battle higher into the late summer, then the real interesting question is just how low will VIX be then ? Are we looking at VIX <10 ?

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a little more later...on those historic indexes