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What has happened to volatility

  • #61
  • Jun 5, 2017 10:09am Jun 5, 2017 10:09am
Quoting Tom81
Why don't we see strong movements even when technical price patterns are there, even when news like yesterday May's would normally shock markets, French elections with possible Frexit ahead, and still VIX near all time low? What do we need? SP500 to crash, EU disintegration, WW3 getting started to bring volatility back to the markets? Are ECB, FED, BOE and BOJ killing it with their Asset purchase programmes? Nearly all hedge funds have fled from forex market since 2012, because of low volatility. Strange times... {image}
Would WW3 be worth it just for the volatility? Let's hope your not a military aged man. As for "even when news like yesterday May's would normally shock markets, French elections with possible Frexit ahead" The GBP is saving its major volatility for the elections and the Rosthchilds Banker was never going to lose (Has anyone here beaten them yet in currency speculation ?).
Trading is a Zero sum game. Someone winning means someone losing.
  • #62
  • Jun 5, 2017 12:44pm Jun 5, 2017 12:44pm
Quoting Darastonius
Just google "VIX manipulation", a lot of recent articles come up, basically this itself can be the bubble. The VIX kept supressed, so people are shorting volatility, and if everybody is shorting, it is obvious, who takes the long side of the orders. And then once they'll let go of it....
As long as Asset purchase programs of CBs are in the game and interest rates are hovering around zero, it's the only logical short term trading strategy to short any spike of volatility (or buy in SP500 correction). That's why we need some big scary fundamental event to crush S&P 500 and when it happens, index compression will be quick and deep, as CBs are out of additional ammunition to intervene right now and markets volatility will return with vengeance.
  • #63
  • Jun 5, 2017 1:00pm Jun 5, 2017 1:00pm
btfd the name of the game until it's not. See the May 16/17 little <2% dip was bought back with a vengeance. I am looking for something maybe even this week off the Comey testimony on 6/8, but that's just a crap shoot....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #64
  • Jun 5, 2017 1:03pm Jun 5, 2017 1:03pm
Quoting Darastonius
Just google "VIX manipulation", a lot of recent articles come up....
I have not read those papers & I'm prolly not smart enough to form an opinion even if I did, but people throw around the word "manipulation" a lot. The sun comes up every day - is that a conspiracy?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #65
  • Jun 5, 2017 1:20pm Jun 5, 2017 1:20pm
Quoting The Fool
btfd the name of the game until it's not. See the May 16/17 little <2% dip was bought back with a vengeance. I am looking for something maybe even this week off the Comey testimony on 6/8, but that's just a crap shoot....
I don't think even impeachment of Trump would do it, but new hawkish FED chairman, or new ECB president with German origin just might. When smart money becomes convinced era of cheap money is over, they will short stocks like crazy as there are no real sector economy fundamentals for stock indexes to be where they are now. We might have to wait a year or two but it will happen. Germans are demanding next ECB chairman seat and they will get it.
  • #66
  • Jun 5, 2017 2:20pm Jun 5, 2017 2:20pm
tiny volume in the spoos today, prolly close < 1/2 of recent mean, which has been low, too. Low volume will help a volatility spike's amplitude if we get something to spook the bots. Tough to trade that with nothing scheduled really, but it's out there....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #67
  • Jun 6, 2017 12:53am Jun 6, 2017 12:53am
Sure we get some volatility for the Election but I may have to agree the markets are not that volatile these days. Now we have summer coming and its getting even quitter. Maybe its time to plan a vacation while the markets does the same.
  • #68
  • Jun 6, 2017 1:07am Jun 6, 2017 1:07am
~13:48 - Financial Markets Volatility....from 09 onwards has been crashed..:
Inserted Video
  • #69
  • Jun 6, 2017 2:10am Jun 6, 2017 2:10am
Quoting Black Bird
~13:48 - Financial Markets Volatility....from 09 onwards has been crashed..: https://www.youtube.com/watch?v=L7G0...oAsEl05Us6UVRM
Excellent presentation. Thanks for sharing Black Bird :-)
  • #70
  • Jun 6, 2017 2:39am Jun 6, 2017 2:39am
Quoting Black Bird
~13:48 - Financial Markets Volatility....from 09 onwards has been crashed..:
watched a bit there at your mark where he talks about volatility changes as a result of increased liquidity. I think also the ascendancy of hft has played a part, which of course is just another aspect of increased liquidity. Trading in this era of flat volatility has forced us to get good at predicting volatility increase around schedule events - there have been some good ones - the Brazilian, Brexit, and US 2016 elections were the best, generally. There will be others, scheduled and otherwise. The best trade often no trade and anyone knows that, just depressing to face the music and realize that the adage is true for periods of months and years. So, you do other things & keep some dry powder ready - everything changes.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #71
  • Jun 7, 2017 11:54am Jun 7, 2017 11:54am
Volatility on tap: Thursday we have the Comey testimony, elections in the UK, and the ECB. Some possibilities there. I am already positioned for this trifecta with SPY put spreads, VXX call spreads. Prolly another btfd and the dips have gotten so weak, they are just little stretches of flat.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #72
  • Jun 7, 2017 12:14pm Jun 7, 2017 12:14pm
Quoting Tom81
{quote} EUR/USD 130 pips weekly volatility not bad? This used to be near daily volatility for this pairs. Similar with all majors... According to John Kicklighter at dailyFX, "the current 8-day range for the $SPY ETF (S&P 500) is the fifth smallest in 23 years" If this is not super low volatility, I don't know what it is.
The market is topping. It is a prolonged coiled spring.

Quoting Copernicus
{quote} Excellent presentation. Thanks for sharing Black Bird :-)
Ha! I thought everyone had already seen this! It is a great presentation I agree!
If you are good at something, never do it for free--Joker
  • #73
  • Edited 7:04am Jun 20, 2017 6:50am | Edited 7:04am
Since we discussed this matter, the VIX has hit it's lowest since 1993, and then yesterday I saw an article on CNBC, that this is the slowest period in the last 50 years. Like seriously, how choppy can this get?
Price and volume reveals everything. The market moves on supply and demand.
  • #74
  • Edited 7:41am Jun 20, 2017 7:31am | Edited 7:41am
Quoting Darastonius
Since we discussed this matter, the VIX has hit it's lowest since 1993, and then yesterday I saw an article on CNBC, that this is the slowest period in the last 50 years. Like seriously, how choppy can this get?
This puts things into context.

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There has been a progressive movement of volatility towards extremes which is anti-correlated with liquidity....... namely, extremely high volatility/low liquidity eg. 2008, to extremely low volatility/high liquidity eg. 2007 and 2017. When the snap ultimately happens it is likely that it will be more severe than 2008 and exacerbated by the algo's and unlikely....... this time round....... to be reined in by central bank intervention without serious hyperinflation consequences. The can can only be kicked down the road for so long. Ultimately the lenders need to take a hit for the excesses of rampant debt issuance.
  • #75
  • Last Post: Jun 20, 2017 3:07pm Jun 20, 2017 3:07pm
2014 and 2015 were the worst years since 1995 or so for my trend followind and momentum strategies.
2016.. not so bad. 2017.. pretty good but cannot be compared to 2008-2013.
I DON'T see any problem with this low volatility thing assuming that you have realistic expectations.
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