VIX: Not So Fast

It’s been 14 months since Trump tweeted that “trade wars are good and easy to win.”  Since its close that day at 2691.25, SPX has ranged 608 points — from its Dec 26 low of 2346 to last week’s high of 2954.

We’re seen many factors play into that 608 point spread: countless breathless reports of an impending trade deal, a truly laughable GDP print, the FOMC’s humiliating retreat from normalization. The most impactful factor of all, however, was Mnuchin’s convening of the Plunge Protection Team.

Though the decisions made during that call — so important that the heads of the Fed, SEC, CFTC, FDIC and OCC were called away on Christmas eve — will remain shrouded in mystery (minutes are not released), the outcome was obvious: VIX was crushed by 70%.

Now that the narrative is fraying a bit, we’re seeing VIX regain some of its swagger.  As a result, ES is tagging successive new downside targets.continued for members


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