Nifty weakness and potential breakdown fear is not visible in VIX - What can be the reason?

Nifty & Bank Nifty discussions
1

This was the one observation that I’m sure many of us are having w.r.t VIX - Why is it low when nifty is close to breaking its yearly lows ?

This twitter thread by Vijay Thakkar has some interesting data about the same topic :

On 8th March 2022 Nifty made low at 15671.45 that time India vix was closed at 28.58

On 12th May 2022 Nifty made low 15735.75 that time India vix was closed 24.27

Today 13th June 2022 Nifty Made low 15684 and India vix closed 22.36

Does that indicate that market (esp. bulls) are comfortable going long at these levels ?

This insight by premal parekh is also very interesting :

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What do you think about the fear levels in the mrkt ? are ppl not worried and ready to buy the dip like the VIX is suggesting or is VIX not truly indicating the fear in the street ?

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If it breaks 15600, its going to pile on.

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3

VIX at 10.95 - below 11 after a long time. would be unbelievable if we see VIX in single digit by mistake

4

yeah the options i bought are in water. all premiums down.

5

Looks like there is no fear in the market - unidimensional

6

yeah everyone drinking thumps-up and trading. No fear.

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7

took small positions at 9:17, stopped out at 9:19 :sweat_smile:

8

okay that was quick. then later it did down up move. these markets i am telling you have gotten strange since corona.

9

Has it not been just going up and up since March last week, with a brief respite in between?

Is that the reason for VIX being so low - no fear. Just come, buy and wait for it to go up the next day.

What am I missing?

10

yeah that is the case. even today right now bank nifty at a good resistance zone. Plus a long weekend. So Tuesday open. Gap up breaking the resistance or pew fall. tuesday will know. Strange market days.

11

Either MF’s are loaded with cash or someone somewhere feels or is aware that rate cuts are going to happen much much sooner that we think today. In that case, 18,000 will look quite a small number

All those buying from 16,800 or 17,000 will make boatloads else become long term investors!

12

My long term puts a bit shaky now.

:smile: good one

13

oops!!! Sorry!!!

I was just thinking the other day - with so many elections this year and the Big One next year - will anyone risk the market tanking due to high interest rates - inflation be damned, just fix the base year or the basket or something that I am sure the economists can think of - we are then good to go!!

14

these politicians know how to spin anything. If the market tanks they will say look all the rich have lost the wealth, we are bringing equality.

15

I fear the most when vix is soooo low. It has to go up from here. I would prefer it somewhere around 14 to 15.

16

Not that I follow MMI by Tickertape but I totally agree with this.

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Let it cool down a bit. Right now everyday nifty closes 100 points up. I am very light at this stage.

17

really unbelievable guys, last 30mts nifty moved like bitcoin

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1 Like
18

Even SGX nifty is on steroids

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it looks like breaking all time high on bank nifty happening sooner than nifty. in the money puts on banknifty is at discount, looks like big hands writing them in mass for discount which also bringing down vix.

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If bank nifty went to 44k i would be happy :blush: