(you can't unsee this)
| | | | Don Kaufman here. | Most traders think VIX at 15 means "low volatility." They're missing the real story. | While everyone's focused on that headline number, I'm staring at something that's genuinely freaking me out: a $2 contango in the volatility futures. | In 25+ years of trading, I've never seen complacency this extreme. And I mean never. | You will not see complacency bigger than what we're seeing right now. We just won't see it. That crap is nuts. | | | | The Signal Hidden in Plain Sight | Here's what's happening that nobody's talking about: While spot VIX sits around 15, the September volatility futures are pricing about 17. November at 19. | December? | We're looking at nearly 20. | That's a $2 spread between where volatility is today and where the market thinks it'll be just weeks from now. | To put this in perspective, two weeks ago that same spread was only $1.25. A month ago? We're talking about normal contango levels. | This is one of the largest contangos I've ever seen. Period. | Why This Matters More Than You Think | A contango this steep tells you everything about market psychology right now. | It's like the marketplace is saying, "Sure, nothing's happening today, but crap's definitely gonna hit the fan in 22 days." | The problem? | When everyone's positioned for future volatility while ignoring present opportunity, you get these massive disconnects. And disconnects create edges. | I've been in this business long enough to know what extreme complacency looks like. | And that fever pitch we've seen driving markets? It's completely evaporated. | The Technical Story Nobody's Telling | Here's where it gets interesting from a technical standpoint. | I use something called product depth charts - a feature I actually helped build back in my ThinkOrSwim days. | Think of it like a yield curve, but for volatility across different expiration months. | When you chart these curves, you can actually visualize market sentiment. | A normal market shows a gentle upward slope - slightly higher volatility expectations as you go further out in time. | Makes sense, right? | More time equals more uncertainty. | But what are we seeing now? | The curve is so steep it's almost vertical. We're talking about a $4 difference between current VIX and volatility futures just 50 days out. | That's not normal market behavior. That's fear disguised as complacency. | The market's telling us a story right now. The question is: are you listening? | To your success, | Don Kaufman | P.S.- Want to see these volatility signals in real-time? I break down setups like this $2 contango live with my trading room members every morning. When extreme readings like this hit, timing is everything. Join here to catch the next signal before it moves. | | |
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