The Fed is staying the course and winding down their bond buying program. We have some higher short term rates but lower long term rates on the horizon as growth is better but still slow. That is exactly what the Fed wants. Slow and steady wins the race and for now stock like the news. Maybe we can catch a bit more rally if we can put the Middle East genie back in the bottle. For now VIX is taking a thumping as the good economic
As we have reported in our morning Volatility Reports, realized volatility in the broader markets are relatively low, but the VIX and the vol. products really are not moving. The only thing moving is the IV in the volatility products and those are coming in. The simple fact is that there are still buyers of OTM puts in the indexes and they are not exiting yet. Buying protection for an extended period is looking like the new normal as we head into Q2, since there is not enough of a sell off to unwind it. Tomorrow could be different of course.