Complacency Reigns Supreme–Nothing Can Possibly Go Wrong, Right?

So by all means, buy the dip now that the VIX soared in full-blown panic from 12 to 17.

One of the more remarkable features of the Bull market in stocks is the ascendancy of complacency and the banishing of fear. Take a look at this chart of the “fear index,” the VIX–more properly, a measure of volatility:

The VIX popping up to 17 from 12 now qualifies as an extreme of fear which gives the Bulls the go-ahead to buy the dip once again.

Even more striking is the daily chart of VXX, a short-term VIX-based etn: A tiny blip up from 24 to 26 now qualifies as an extreme of panic.

Equally remarkable is the steady decline in both VIX and VXX: complacency now reigns supreme.

The complacency is the result of stocks’ steady rise for over two years–9 quarters of advances with only one spike down in october 2014–a spot of bother that was quickly reversed by a Federal Reserve flunky talking up QE4 (another round of quantitative easing to boost stocks).

No wonder complacency reigns supreme: any time the stock market tumbles by more than 3%, a Federal Reserve flack runs to a microphone and starts talking about how the Fed stands ready to launch QE4 or “whatever it takes” to push stocks back into rally mode.

For context, recall that both VIX and VXX tend to reach 40 in real moments of panic/fear. That the VXX “soaring” 2 points from 24 to 26 now qualifies as an extreme of fear is absurd.

Yet this is the logical result of central banks constantly “saving” equities every time they swoon the slightest bit: traders and punters know that the Fed making reassuring sounds is all that’s needed to reverse any decline and restart the Bull advance.

But a couple of things have changed recently. The QE baton has been passed from the Fed to the European Central Bank (ECB), famously ready to do “whatever it takes,” but the ECB’s QE bond-buying hasn’t triggered the global rally that many expected.

Secondly, China is rolling over the first time in six years. The engines that pulled the global economy out of the hole in 2009–the Federal Reserve and China–have stopped, and there are no equivalent engines warming up.

So by all means, buy the dip now that the VIX soared in full-blown panic from 12 to 17. Nothing can possibly go wrong as long as a Fed flack stands ready to spew the same old assurances of “whatever it takes” into a microphone.

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  • ClubToTheHead

    “The Fear Index” is also the name of a great novel by Robert Harris.

  • Tech1

    The fear index(VIX) is just another way to play the market which only moves one of two directions-up or down which you can make money with either way. Just because the dumb money sucked into Wall St. run 401K plans loses on down moves is how the smart boys collect more.
    I noticed that the next article was about “human induced global warming” and now I’ve lost respect for George’s Blog! There isn’t any and no mater how many so-called “scientists” say there is doesn’t make it true. Living in MN I’ve experienced all the so-called “global warming” freezing half to death with record cold. Went down to Key Largo and the ocean is still where it was when I was down there in the 1950’s and 1970’s. My own brother runs the UN selected agency to “save the reefs” Reefcheck and it’s just PR and propaganda for an agenda. Funny we used to be a polluted wasteland here when I grew up in the 50’s but that was shipped to China and other “developing” nations long ago. Pittsburgh isn’t steel it’s the healthcare scam now and Youngstown where my mother was from was shut down on Black Monday and Hoffa is long gone. Funny too is Time Magazine had “Global cooling” on the cover back then. It’s just how the manipulate the masses with fear of something to move them along and usually the end result is more control and taxes. The masses don’t respond to intelligent discussions so they use other ways like”Terror” similar to a cattle prod to move the “herd”.
    Disclaimer: I grew up in the 1950’s and everyone is my family is a scientist and my father was at John’s Hopkins, Columbia, CSIRO, worked for the Pentagon during Vietnam, Chairman of the Dept, of Biology at Tufts tied to the Fletcher School(State Dept, and CIA training academy) and taught some of the Rockefellers biology in Manhattan in the 60’s etc. (He greatly admired Henry Kissenger) Brother runs the Rockefeller funded Reefcheck the UN designated group to “save the coral reefs” which just got funding from Conoco Phillips to save Haiti?(they want it for a deepwater port for supertankers last I heard) Screws young girls in third world countries mostly then stuff’s the tax free cash in foreign accounts)
    I was working at NCS Pearson which had bought me from Burlington, Mass and witnessed them getting the contract after 911 from GW Bush to set up the TSA which they over billed hundreds of millions on plus had GW Bush and Ted Kennedy push through the “No Child Left Behind Act” with Akin &Gump who tells the “president” what to do and say-Vernon Jordan told Big Bill and Robert C. Langdon Jr. told Bushie what to do.(Law firm in the movie “Syriana”) Wouldn’t you imagine No Child Left Behind” would benefit the largest school/military/government/prison industrial global corporation on the planet earth??? Sure does!-BILLIONS and they could care less what the kids learn or the the college kids etc. Tests are about control and MONEY. Global control folks and it’s worse than you think with the farms out here growing death corn tied to the healthcare industry and cancer industry and big pharma. Anyway if the kids in “school” don’t just sit there like idiots and ask a question? Well they tell them they have ADD and force drugs on them making money off that plus if they really don’t comply? The private “prison industrial complex” is waiting and Walmart processes it’s returns at one here saving millions.
    Do what you’re told, don’t ask questions, don’t think, bend over, it’s over, just say:”charge it!!!(on your Chase Visa or Mastercard-easy and so much better than the past. Everything is mostly an illusion and as Adolf Hitler said”People don’t think”-Rene Descarte said:”I think, therefore I am”. Dangerous today.
    I also lived almost across from Nuclear Metals Corp, in Concord, Mass and across the river from Grace Chemical Corp. in Acton both of which are EPA Superfund Sites. Grace went “bankrupt” to get out of the messes and lawsuits for asbestos and pollution. and moved to Communist China doing well. Nuclear Metals made all the depleted uranium for the military-U-238 penetrators etc. Cancers and hushed up by the politicians and real estate folks after all it’s Concord! After awhile the “plan” is to build very expensive Townhouses or something after pouring concrete over Nuclear Metals place etc. They haven’t figured out how to move the buildings and materials to Utah and bury it forever at EnvronCare south of Salt Lake.
    What are ya gonna do? It is what it is but they told me I should get checked out because the funeral home dude who “did” my father said he has been burying them all at a rapid rate from cancers. My best friend only made it to 47 so I’m lucky! It helps to have a black sense of humor!
    Military Industrial Complex, Prison Industrial Complex, Healthcare Industrial Complex, Educational Industrial Complex, Agribusiness Industrial Complex, Pharma Industrial Complex, Financial Industrial Complex etc. and it’s already a global reality-total control. Are those RFID chips itchy???? Do they come in various colors? If we’re “good” can they stimulate our brain’s pleasure center? We sure won’t have any “money” it will all be in the computer just a number in some server. They will own everything, we won’t need to own anything or have any money-not real money like in Auschwitz which was much more primitive than what they have in mind. Just say:”Charge it!

  • This is a very enlightening conversation, and well worth the viewing.

    Mar 27, 2015 TDV: Ending the Drug War and the US Government Terrorist Organization

    Jeff is interviewed by Jim Goddard of the Goddard Report, topics include, gold is real money, a massive change coming, fiat currency collapse, the rise of Bitcoin and cryptocurrencies, freedom to trade, marijuana, medical cannabis oil, hemp, ending the war on drugs, the evil that is government, unjust prison system, unjust laws, fascism, police and lawyers the biggest lobbyists for the war on drugs, Barack Obama, the Whitehouse now exempt from from the freedom of information act, rampant violation of the constitution, Canada following down the same path.