Talk of a stock market bubble has started to pick up, but it’s nowhere near previous extremes, and that’s probably a good thing (see charts below).
According to Bloomberg, a monstrous trade occurred Monday in VIX futures. It’s always impossible to know the exact underlying strategy, but consensus is that it was a bet on higher volatility into June/July. Looking at other large (seemingly) directional trades in the VIX, the track record is mixed, but generally we find that when there is a large trade betting on a rise in volatility, it happens more often than not.
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