One of the key ways of manipulating these “‘markets”” over the prior years has been through the use of VIX slamming.
Just buy a bunch of VIX ETF and ETN products and you can magically elevate the overlying cash markets.
But the VIX products are not just wounded, they are destroyed in several important cases.
I rather think that this method is now toast.
So they’ll figure out something else next…I expect that plain old buying eminis hand over fist is the solution of choice here…a return to the old tried and true.
But what if that signal is no longer all that effective in swaying the non-emotional algos? What if the cash market is now untethered from an easily controlled leveraged tail-wags-the-dog VIX-like product?
That means there’s more reversion to the mean underway. It also means they’ve temporarily lost control.