Hedge Fund CIO: “On Thursday We Got A Glimpse Of What A Big Political Crisis Looks Like”

zerohedge.com / by Tyler Durden / May 21, 2017

From the latest Weekend Notes by One River Asset Management’s Eric Peters

Beep Beep

The market finally woke up,” said Roadrunner, the market’s top volatility trader.“The volatility of the VIX index jumped 40% on Wednesday, that’s the 2nd biggest daily move in the VVIX we’ve ever seen.” The SP fell just 1.8% on Trump/Comey jitters.

“We’ve been short vol all year, and sold more into that spike. When the vol of vol jumps violently, and people are panic-buying, it’s pretty easy to do.” In the background, volatility resumed its collapse. “Feels like this will be a really busy summer.”

On Thursday we got a glimpse of what a big political crisis looks like,” continued Roadrunner, relaxed. Brazilian stocks had fallen 10%, the currency fell 6%. The 3x leveraged Brazilian ETF fell 40%.

“That’s what a crisis would look like here too. But the market is telling us this isn’t what’s happening.”

The SP 500 closed the week -0.4%. The VIX finished the week +1.6 points at 12.04. “This drama won’t play out the way the media suggests. They’ve been wrong the whole way. The Trump agenda hasn’t been permanently derailed.


Read more ... source: The Bitcoin Channel

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