As Hedgeye CEO Keith McCullough observed in today’s Morning Newsletter, the VIX officially crashed last week, down -5.7% to -21.6% YTD. “If you want to fail really, really, fast in this business,” McCullough wrote, “get your clients levered-long the US stock market at 10 VIX (US Equity Volatility Index).”
We asked: Are you concerned about the ‘crash’ in volatility? Here’s what you thought.
At the time of this post, 56% said YES; 44% said NO.
A voter who is concerned about the ‘crash’ in volatility answered YES because:
- My timeframe is intermediate to longer term. The way I read it, extreme low levels on the VIX are, at a minimum, bearish intermediate term. Extreme highs are bullish same timeframe. Margin debt, Investors Intelligence bullish %, Speculation in penny stocks, and the length of time without a moderate correction of 8 - 10% only add to that concern.
Conversely, voters who voted NO had this to say:
- "concerned" implies something has gone wrong. volatility is increasingly... well..,. volatile and has become an independent factor in the marketplace. if it "crashed," it will be back
- Who's buying? HM's PM's - as long as they are, little else matters except a news catalyst. Therein lies the rub. Low volume and you could knock this market over with a feather.