Complacency in Its Nascency

Back in the summer of 2011, there were several trading sessions where the Dow suffered steep selling, yet the VIX was red. This persisted for a bit before the VIX finally got the message and spiked up to 48. 

The reason why I raise that issue is due to the actual VIX soundly getting whacked today, despite the S&P 500 below 2000 and the Dow down by roughly 300 points as I write this. 

We may or may not be seeing some signs of complacency in the market, stemming from the perceived overreaction to the Brexit vote. But, clearly, the VIX action merits watching beyond the usual "it is broken" excuse. 

Thus, a worthy topic to consider now is just how many longs have actually sold yet. If we have a situation where most are simply holding and hoping the Brexit was an overreaction, letting things play out, so to speak, then that would seem to jive with the sentiment we saw just prior to the summer 2011 swoon as the VIX finally played catch-up. 

Elsewhere, natural gas is quietly outperforming crude again today. UNG has taken several impressive strides this late-spring and summer. I am looking to see if natty takes over the reigns from crude this summer on a relative basis at least.