FALLING VIX & EQUITY PROTECTION AS TRADERS MOVE TO BOND MARKET

Speculators are adding to VIX shorts by the most in 9 months...

By doing this equity traders are dumping equity protection as they surge into safe havens like bonds.

10Y Treasury specs are the longest since Dec 2007

But aggregate Treasury complex positioning (in 10Y equivalents) shifted back into bearish territory in the last two weeks as Eurodollar shorts (bets on rate hikes) increased back near record shorts...

 

However, while Eurodollar shorts (rate hike bets) have increased, it appears traders are shifting the timing further out as open interest shifts notably further out and call options (implicitly betting on lower rates, not higher) are dominating trading in recent days (as economic data crashes).