The market’s favorite measure of volatility, the VIX Index, closed in the low 14- to 17-point range throughout August. According to The Kobeissi letter, the 25-session run is the longest such streak since May 1992.
Yet, with the S&P 500 inching higher for weeks without at least a 1% pullback, market strategists are flagging the apparent resilience as a warning, not comfort.
The Coiled Spring
Swissblock Macro Strategist Henrik Zeberg sees the calm as evidence, not counter-evidence. “Credit never shows stress at the top, because complacency in credit is the top,” he wrote.
The ICE BofA US High Yield option-adjusted spread sits at 2.65%, compressed near cycle lows—exactly where it stood in March 2000 and October 2007, on the eve of the two largest credit unwinds of the modern era.
