The recent drop in volatility / VIX.

[Laissez Faire]

So, last week the VIX dropped to the lowest level since November 2021.

The e-mini S&P 500 had a 14.25 point range in regular trading hours this Tuesday - the smallest since August 2021. Average range in regular trading hours so far in 2023 is 52.5 points.

With the exception of yesterday's roller coaster the market definitely is taking on a new characteristic here that we haven't seen in a long while.

Any thoughts?

Is this just a temporary pause before volatility picks up again?

 

[Primal Trader]

"the market definitely is taking on a new characteristic here that we haven't seen in a long while."

Yes, I would go even further and say there are new characteristics we have NEVER seen before, i.e., the exploding popularity of ODTE speculation. The VIX of old might never be the same. Intellectually, I have been fascinated by volatility and the VIX over the years. By contrast, I don't have much of a grasp of the new one day VIX, nor how I could use ODTE options in a wise, calculated risk-taking way.

The stock market is in uncharted territory, we are in a new ocean so to speak, with various hazards unseen and new "weather patterns." How many will successfully navigate this ocean remains to be seen. Right now the ocean is quite calm some days, even boring and lulling some to sleep. When a huge storm blows up eventually, who knows how this altered energetic system will react. For now I will focus more on the territory and things I better understand, like currencies, PMs, and Energy. Happy Sailing!

 

[earth_imperator]

IMO signs of US economy cooling down b/c China imports less from the West as it produces these goods domestically...
Best example: the current DRAM and NAND prices falling deeply due to overproduction in the West b/c China no more imports them as they more and more make their own...
The idiotic US sanctions of this senilovich undeserved in the WH are backfiring...

 

[murray t turtle]

So, last week the VIX dropped to the lowest level since November 2021.

The e-mini S&P 500 had a 14.25 point range in regular trading hours this Tuesday - the smallest since August 2021. Average range in regular trading hours so far in 2023 is 52.5 points.

With the exception of yesterday's roller coaster the market definitely is taking on a new characteristic here that we haven't seen in a long while.

Any thoughts?

Is this just a temporary pause before volatility picks up again?

%%
HINDSIGHT, but right.
ONE of the few times in my life i heard Dave Ramsey say[Mayday] something negative about the US economy, not that he was making a prediction+ he used the ''IF'' word anyway.
I took profits on XLK related Qqq related , much sooner than i had planned.
Dave ramsey said something like ...... if joe biden doesnt run the economy in a ditch.....
FOR sure tuesday's super low vol ume was related to that budget concern.
SPY benchmark is looking much better as of 5-10-2023; may not price but vol ume;
no wonder\ sleepers + senile woke up + realized its so close to an election year, all better be on best behavior .
ES = 40 %Sell
spxl =72%
sso =88% buy; adding to the complexity SH =88% buy.
So buyer beware unless long term investors[rated by barchart opinion;
not a prediction]

 

[KCalhoun]

I think it's due to bounce so I bought uvix uvxy today

 

[murray t turtle]

I think it's due to bounce so I bought uvix uvxy today

%%
THAT's a notable change\ market leaders like XOM, CVX MUR ,MRO dipped negative just a bit today\YTD.
Good companies ;
I buy gasoline from all those , but i'm not a fossil fuel freak hater/LOL

 

[vincentnyc]

I think it's due to bounce so I bought uvix uvxy today

maybe stop trading these garbage etn? i used to trade uvxy, spxl, sqqq and heck even tvix before it got delisted. move onto futures like mes or es. u can go long or short all u want. the benefit of trading futes are no wash sell rules. no time decay. the con is you need to have large amount money in your account depending on the broker and maybe commissions. my only regrets was not being introduce to trading futes sooner.

 

[murray t turtle]

maybe stop trading these garbage etn? i used to trade uvxy, spxl, sqqq and heck even tvix before it got delisted. move onto futures like mes or es. u can go long or short all u want. the benefit of trading futes are wash sell rules. no time decay. the con is you need to have large amount money in your account depending on the broker and maybe commissions.

%%
Exactly\
I never could make the money i wanted with sqqq, not consistantly.................
SPXL+ sso , SPY, cash + copper is different with me; i still like those, more so than ES + traded ES plenty .ES pays no dividends, not a benefit @ all , but like IBD says never buy something for dividends, so its a minor pointLOL.
NO wonder\ ES =40 % buy+ simple math 60% sell;
sso =88% buy +SH = 88%sell .barchart opinion, not mine.
Strangely +it's my fault, SH moves so slow its hard for me to get a good SH entry, so have to facTor + figure in a traders personality, shooting skill, kicking skill, risk + reward.
NO problem on SH exit, i meant a difficult entry ....

 

[Laissez Faire]

"the market definitely is taking on a new characteristic here that we haven't seen in a long while."

Yes, I would go even further and say there are new characteristics we have NEVER seen before, i.e., the exploding popularity of ODTE speculation. The VIX of old might never be the same. Intellectually, I have been fascinated by volatility and the VIX over the years. By contrast, I don't have much of a grasp of the new one day VIX, nor how I could use ODTE options in a wise, calculated risk-taking way.

The stock market is in uncharted territory, we are in a new ocean so to speak, with various hazards unseen and new "weather patterns." How many will successfully navigate this ocean remains to be seen. Right now the ocean is quite calm some days, even boring and lulling some to sleep. When a huge storm blows up eventually, who knows how this altered energetic system will react. For now I will focus more on the territory and things I better understand, like currencies, PMs, and Energy. Happy Sailing!

Interesting comment. I saw a similar comment suggesting 0DTE may indeed have changed the VIX of old.

The mechanics of the options market and the impact on index futures and the stock market is something I don't know too much about, beyond being aware of options expiration dates (which again may also have changed with the rise of 0DTE).

 

[savoir]

So, last week the VIX dropped to the lowest level since November 2021.

The e-mini S&P 500 had a 14.25 point range in regular trading hours this Tuesday - the smallest since August 2021. Average range in regular trading hours so far in 2023 is 52.5 points.

With the exception of yesterday's roller coaster the market definitely is taking on a new characteristic here that we haven't seen in a long while.

Any thoughts?

Is this just a temporary pause before volatility picks up again?

Your post suggests you aren’t aware that volatility is cyclical. That’s hard to believe.

Most years are a grind. Infrequently there is a crisis that presents opportunities for easy outsized profits. These periods are relatively brief in a historical context and appear as spikes on the volatility index.

Trading 101.