Oh here we go again. The $VIX is broken, there is no more risk, and nothing will make the $VIX grow up again. On the surface all the collective weeping about the $VIX makes sense. Relentless selling day after day has pounded it back into the pre-teen levels. Since April 14 there have been only 3 green volume days for the $VIX. No matter what happens with the $RUT, Ukraine, there simply doesn’t seem to be any risk appetite:

To which I say: Silly. There’s nothing new about this action. Go back to January, nobody wanted the $VIX then either, and boy were they in a hurry to make the $VIX an adult again. How soon they forget:

The main fact remains: Being long the market with the $VIX in the 11-12 range is generally not a good idea. But the $SPX keeps going higher and never drops and the trends are intact? Yes they are. And so they were in the 1996 and in 2007 periods when the weekly $SPX was widely disconnected from its 100MA then as well. And here we are with the largest disconnect ever. Things can change quickly and the current narrow range in trading is certainly the path to maximum frustration for traders. But don’t confuse the micro for the macro:

And so it is no surprise people think risk has been eliminated. We are at record highs after all. But the excitement continues to be muted with volumes seemingly decreasing every single day. And who can blame people for wanting to sit this one out. Who wants to buy here and now and be left holding the bag? Janet Yellen is fond of saying there are no bubbles, and if there are, they may be in small caps. Has she looked at a chart of the Trannies lately?

Yea it’s no surprise the $VIX is a pre-teen here, but that’s the thing about kids these days. They can grow up so fast.