Daal posted a link to an excellent piece by Ray Dalio. If the big picture interests you, I recommend you mosey over and take a look, if you haven't already seen it. https://www.elitetrader.com/et/threads/global-macro-trading-journal.215992/page-724#post-4455909
I'm going to copy my comments from another site I had regarding the low VIX and why it's going lower: Some more comments regarding the VIX. Before one attempts to buy the VIX anticipating some mean reversion or higher vol conditions, it's important to note that index volatility is not the same thing as volatility by itself. The S&P 500 is comprised of 500 individual stocks that each have their own volatility characteristics. What governs the volatility of the index is not simply just the volatility of each stock but each stock's correlation to the index. What's happening now and what has been going on for months now is that correlations are breaking down in the S&P 500. A simple way to think of this is, as correlations among the 500 stocks move closer to 1, overall index volatility will increase. As correlations move closer to 0, overall index volatility will decrease. This presents the fascinating property where theoretically speaking individual component volatility could increase substantially while index volatility approaches zero. I fear many traders are focusing simply on index volatility by itself with no consideration for the internal correlations. So if one is interested in buying "cheap vol" right now, make sure you understand that you are implicitly betting on the internal correlations of the component stocks increasing. The VIX closed below 10 today. Let me add to my previous comments. The chart below is KCJ. This is the CBOE implied correlation index between the 50 largest stocks in the S&P 500 and the index itself. In a previous post I made the assertion that correlation breakdowns is what is leading the VIX lower. Today we printed a new all time low (as far as the index goes back) to around 40 (100 would be perfect 1 to 1 correlation). This chart is showing that more and more stocks are moving in different directions and this "suppresses" index volatility. It's also implying you would want to be a buyer of index vol and a seller of component vol. It's crucial for vol traders to understand the current volatility regime we are in and that regime is one where even if vol itself increases in stocks, index vol can keep drifting lower. Caveat emptor...
Mav - you are dispensing knowledge elsewhere!?! What site? I must assimilate all knowledge you share with the people!
The Euro continues to run. Breaking through the monthly A up. Pulled back nicely to the top of the QTR A up and bounced.
re bitcoin if you look at a chart from around April, all the coins have been straight moonshots, jj90 I think, mentioned Japan giving their stamp of approval, making it legal. Bitcoin is the 800 pound gorilla, with ETH Ethereum and XRP Ripple in the race. Ripple looks like smart money to me if you check out their website. I think they are going to eat into the overseas payment/currency market. There is definitely a greater fool theory going on with recent trading. see link for one man's opinion. Mav I think Etherueum classic will have lower vol, but the security issues with trading these things loom large. I am sure you are aware of the Mt Gox disaster. https://coinmarketcap.com/