“Uncertainty” Skyrockets To A New All Time High
One thing is certain, everything is now uncertain. Considering the fact that the stock market can swing in either direction based on a single Tweet by President Trump, that shouldn't come as a surprise.
The number of news stories that contain the word "uncertainty" has reached a record, according to Bloomberg data, which include stories published from multiple sources. While President Trump might dismiss such media coverage as biased, other measures of global anxiety are also flashing caution.
Meanwhile, VIX/VXX are selling at or near their respective all time lows.
How do we reconcile all of the above?
Well, we cannot. It can be argued that both metrics, the stock market and volatility, are being artificially maintained. However, a more feasible explanation to the above can be attributed to a historic divergence that will correct itself in the very near future.
Perhaps that is the reason we are seeing commercial interest in VIX close to a historic high. At 9X long vs short.