The Market from Another Place

Here we are in the dog days of late-August, with oil resilient after a July pullback, the Yen needing a major intervention this summer, and now the bond market rattling the White House to the point where the Treasury Secretary is making moves on top of constant jawboning. 

And, yet, the VIX itself is not far off its year-to-date lows. 

So, what gives? Well, in addition to some big macro data the week (GDP, PCE), and Jackson Hole at the end of the week, we have NVDA earnings on Wednesday evening.

We also have concrete evidence of the VIX entering one of its seasonally strongest periods until October. 

Courtesy of EquityClock.com, below we have the VIX seasonal performance going back twenty years. As you can see, there is a clear upside bias in volatility for the next six-to-eight weeks, or so.

And that setup is happening just when it seems like complacency is highest amongst bulls and helplessness is setting in amongst bears who, after all, just cannot seem to get anything going...or so it seems.

Recall that the semis topped out as a group back on June 22nd, and NVDA actually topped on May 14th. Now, the durability of those tops remains to be seen.

But with September one week from tomorrow, we now know those are at least intermediate-term tops.  And, again, the lack of concern about that fact makes the complacency argument all the more compelling for a VIX spike this autumn.