. >> you said it, fdr because the vix has fallen to a new eight-year low. we'll tell you how to protect your portfolio. plus, ichaos. >> get in crash position. >> we'll tell you why apple's historic seven for one stock split can cause mass confusion and rare opportunities for you to make money. we'll show you how. >>> and streaming mad. >> i'm mad as hell, but i'm not going to take this anymore. >> netflix is lashing out to internet providers. does it give net flex the upper hand? we'll have a special report. the action starts right now. >> back on the nasdaq market, i'm melissa lee, have no fear the vix volatility index hitting its lowest levels since 2007. is this a good sign or a bad sign for the market. how can you use the low vix to make if money? let's get in to find out. you may be trouble when the resident bear gets bullish. >> i think it's really hard to look at the vix with the ten hand him here. we haven't seen it in a very long time and say all is well. it is well, the s&p is at all time highs, here, we keep grinding higher. so when you look at

how can you use the low vix to make money? let's get in the money and find out. you know there might be trouble when the resident bear gets bullish, dan. contrarian indicator here sitting at this desk. >> i think it's hard to look at the vix with a ten handle. we haven't seen it in a long time. and say that all is well. i mean, it is well. the s&p is at all-time highs and we keep grinding higher. so when you look at that chart right there, it shows the inverse relationship between the vix and the s&p. but it doesn't speak to health. it speaks to complacency. that's one of the things that when you talk about how do you use low implied volatility? well, you can put on some protection for things you own, things that pay you a nice dividend, things that are working. why get out of it if everything is working. especially the last thing for those trying to pick a top in what is summer trading right now. you know the old market saying, never try to short a dull market. >> the vix is sort of screaming like kevin bacon at the end of "animal house," all is well. the thing

what you see now is that vix is at a low level. means that institutions are not particularly concerned, no there buying a lot of portfolio insurance and we're, complacency is probably the wrong word. these prices are being set by people with a lot of money. what it indicates that institutions looking forward 30 days aren't all that worried. david: you can understand why people are concerned about complacency itself. some people say that is the point at which people get a little too cocky. >> well i'm not sure that is quite true. it is bound to go up eventually. the expectations is not going to happen anytime soon. but you've had. there were situations where the vix has been below 11 1/2 many days during the year. 2006 it was below 11 1/2 92 times i think it was. david: wow. >> it was below 60 times in 2005. 1995. people just have a very short memory. david: yeah. >> they don't bring this into a proper perspective. yeah, the market is calm right now but i don't think it is complacent. david: were you surprised, and perhaps even both

how can you use the low vix to make money? let's get in the money and find out. you know there might be trouble when the resident bear gets bullish, dan. contrarian indicator here sitting at this desk. >> i think it's hard to look at the vix with a ten handle. we haven't seen it in a long time. and say that all is well. i mean, it is well. the s&p is at all-time highs and we keep grinding higher. so when you look at that chart right there, it shows the inverse relationship between the vix and the s&p. but it doesn't speak to health. it speaks to complacency. that's one of the things that when you talk about how do you use low implied volatility? well, you can put on some protection for things you own, things that pay you a nice dividend, things that are working. why get out of it if everything is working. especially the last thing for those trying to pick a top in what is summer trading right now. you know the old market saying, never try to short a dull market. >> the vix is sort of screaming like kevin bacon at the end of "animal house," all is well. when compl

that's what the vix is suggesting to me. absence of fear does not suggest we have nothing to fear. don't be confused. >> indeed that's a very illustrative chart. >> look, you look at the word complacency, is the market complacent? it's made you a heck of a lot of money in the past year and a half or so, easily. i say there's a black swan event that could occur to take this market down, given the fact that people aren't protected to the down side? no question about it, but look at the vix for what it is. it's not a market timing tool. it's a measure of volatility. the vix can remain low for a very long period of time. normally i would say buying protection on this tape, a tape as strong as it is, is like buying earthquake insurance. it's absolutely insame. i do agree that volatility is come in dramatically and buying puts right now, buys protection is very cheap. protecting the portfolio with cheap put options, i would agree with that, but look, i think the tape is solid here. i don't think we're looking at complacency. i thi

i am max kaiser and this is the kaiser report you know do you like the vix well the big spike show. has a song goga. things you want it but the for it's going on are well well first of all max tell people what the vix is oh well if the volatility index you know it's a contract that traders can buy and sell to hedge themselves against volatility however the vix like everything else is being manipulated so it's not giving a good price signal it's like you take the batteries out of the of smoke detector in your home so your house could be on fire and you don't hear the smoke detector because it took the batteries out so you don't leave the house even though the flames are engulfing you in your family like i don't hear the smoke detector so must not be a fire so the vix is completely manipulated so it doesn't tell market participants it doesn't give them a signal about the true volatility and it's just another piece of the overall way that markets are being destroyed to service a few kleptocrat well all of these rigged indexes around the world in price signals i think is a form of chumm

just because the vix is low does not mean it can't stay there.ation, if the market ain't broke, don't vix it. [ laughter ] >> we have a low volatility environment and i think we're going to stay there for a while. >> i love the idea you're calling this the new neutral, you're basically appealing to the retail investor, saying this may better your opportunity, this is markets as they were be, but i'm just looking at the vote one of going under way. you can vote on this now at cnbc.com/vote, and in that real-time voting, the majority is not as extreme as it was a moment ago, but two thirds of people who voted already say they think it will be a crazy summer, in other words, low level on the vix is an indicator of trouble ahead, which is in a sense the opposite of what you're trying to lay out. >> yeah, listen, i understand why people feel that way. they've been traumatized by two bubbles and two crashes. while i reference new neutral, i'm referring with respect to the stock market as the old norm normal. if you go back to before 1997, sue and i hav

vix almost in single digits.e rodney dangerfield of rallies. >> the apple split. >> yes. >> was a big story today. >> yes. >> people are saying okay it's 90 something bucks. when will it get to 100? >> that's significant. people are looking at that stock as a regrabbing its leadership role. >> re-grabbing its leadership roelle and goes from having 300 million shares outstanding to 2.1 billion so it takes a lot more for that stock to break through 100. a lot of activity and buying power to get that stock through that level. >> but it's great for trading. >> absolutely. >> absolutely. >> and in its own subtle way it will have an impact on trading overall. >> so i think it's fantastic. >> i think it's a great deal. >> unreal, bob, and you alluded to it yet again and significant in the vix. up 5% and still only at 11. >> there's complacency in the market. >> well, you look at the vix up 5%. people are starting to lock at it and say maybe the market is a little toppy and maybe this is where we start putting money. i k

things he wanted but the folks going on are well well first of all max tell people what the vix is oh well if the volatility index you know it's a contract that traders can buy and sell to hedge themselves against volatility however the vix is like everything else is being manipulated so it's not giving a good price signal it's like you take the batteries out of the of smoke detector in your home so your house could be on fire and you don't have a smoke detector because it took the batteries out so you don't leave the house even though the flames are engulfing you in your family like i don't hear the smoke detector so must not be a fire so the vix is completely manipulated so it doesn't tell market participants it doesn't give them a signal about the true volatility and it's just another piece of the overall way that markets are being destroyed to service a few kleptocrats well all of these rigged indexes around the world in price signals i think is a form of chumming it's basically thrown into the water it's encouraging the seals a minnow is a little fish and little chubby humans to

things you wanted but the frogs going on are well well first of all max tell people what the vix is oh well it's the volatility index you know it's a it's a contract that traders can buy and sell to hedge themselves against volatility however the vix like everything else is being manipulated so it's not giving a good price signal it's like you take the batteries out of the of smoke detector in your home so your house could be on fire and you don't hear the smoke detector because it took the batteries out so you don't leave the house even though the flames are engulfing you in your family like i don't hear the smoke detector so most don't be a fire so the vix is completely manipulated so it doesn't tell market but just suppose it doesn't give them a signal about the true volatility and it's just another piece of the overall way that markets are being destroyed to service a few kleptocrats well all of these rigged indexes around the world in price signals i think is a form of chumming it's basically thrown be into the water it's encouraging the seals a minnow is a little fish little chub

don't look at the vix. i don't think that that's really a good indicator. >> with all duh respect to my great friend. >> it has not worked for the last few years and i think that's really the case. we have to go back and look at the history of the vix. understand where it came from. it doesn't fit right. >> it's broken. not a good indicator. and greg hit the nail on the head what he said about earnings. earnings are the life blood of the marketplace. as long as that takes place, i will be happy. you ask me what worries me? inflation. if we start to see the velocity of oil, you will see me get a little concerned on this. >> it's not just oil. i'm curious. >> sarah, it has got to go across the board. let's go through a real quick history lesson. nothing difference about the soy beeps but they went up very quickly. we have to be very aware of it. >> with that risk of inflation, do you have to adjust your portfolio? do you want to be in gold, for instance? >> great question. i believe that the risks are real bu

etf's that i am recommending people buy these vix indices.hey insure you against shocks in the market. >> investing in volatility might be a hard sell at a time when there is not much volatility around anything at the moment. how do you persuade people to buy in? >> actually, you can sell volatility. if the vix is below 27%, i would sell volatility. if you want to go along, you go along vxx. a 27% trigger. if it is above that, you go higher. why not spend time trying to work out whether the alibaba business model has legs? or go and visit some companies in tech city and work out whether you think they have potential? why not do that rather than buying a derivative? in youru have it portfolio long-term, it can be a very good hedge read what is nice about vix, it always comes back to 20%. you can guarantee it. what is going to happen with alibaba? i do not know. >> coming up, we look at the damage facing barclays. dives took a dark pool yesterday. ♪ >> welcome back to "on the move ." the is one stock that is on move, imagination technologies. s

things you wanted but the fix going on are well well first of all max tell people what the vix is oh well if the volatility index you know it's a it's a contract that traders can buy and sell to hedge themselves against volatility however the vix like everything else is being manipulated so it's not giving a good price signal it's like you take the batteries out of the of smoke detector in your home so your house could be on fire and you don't hear the smoke detector because it took the batteries out so you don't leave the house even though the flames are engulfing you in your family like i don't hear the smoke detector so must be a fire so the vix is completely manipulated so it doesn't tell.

everybody is pointing to things like the vix at seven-year lows. low volumes on the excha innges >> there's always risk out there. the vix this low could be a sign that if there is some shock, we're going to get an outside short-term reaction. but in general, i think we're in a low vol regime. it's not unusual at this part of the economic cycle. we have a lot of liquidity still from central banks. and we have rate and inflation stability. at least for now. that might be the catalyst for this to change. but for the moment i think low volatility can persist. and i think equities, we're seeing data that suggest they can go higher. just looking at today. consumer confidence in home sales, just two more data points i think in a spring of data points telling us that the u.s. is healing. china's pmi that came out sunday, a stable china. a better u.s. better although in a relative sense, europe. i think equities should go higher. >> shouldn't we be worried we haven't seen a correction in, what, years at this point? can we continue the sort of meltup that w

>> look at the vix. >> vix below 11.when i saw that. >> the last two are the banks, the small caps and the transportation stocks suffering. they have had a good month, you pointed this out. >> so it's all systems go still. >> all systems go. apple is up 15%. we've talked about that on this show week after week. i think it's time for people to look at japan on -- on a basis of four things, bill. it's a valuation story. 1.1 times book. it's a growth story. earnings supposed to grow 20% over there versus 6% over here. it's a structural reform story. abe is supposed to come with some things at the end of the month and lastly asset allocation shift. the individuals over there that only 6% of their assets in stocks versus 44% for here so maybe buy japan here. >> that's what we love david about. we'll bring you back and get to the closing countdown. first to dominic chew. >> we're checking what's happening with keurig grown mountain, the best performing stock in the s&p 500 on or about 2:00 p.m. eastern time this. stock started

when you see 10% rally in the vix, it looks like a big incident. listen, let's go to the bonds, it may be one of the safe haven assets, to your point, it was up 1%. we had god. that didn't do a little bit. riskoff, it felt like that was the story in the afternoon. as we head into this hollywood week. you won't see 1860 any time soon, or 1,900 seems like a place where people are headed to a holiday wrooek week where things gets complacent. if anything, if it's going to happen, it would be logical to happen not friday of this week. >> europe had a pretty bad day today. they had a bad day yesterday. bad economic news today, last i checked they don't celebrate until july 4th. >> there you go. >> look at the vix. we trade around optionings, we keep the portfolio the same, the move in the vix while big, it can be a percentage basis to me would be the start of a big move. i would actually be more inclined to buy into this move, buy more protection, because this 13 hand him move in the s&p is really a tiny blip in what's happening in the last two weeks. >>

water interesting, tow, is the vix is not sharing the same concern. the oil markets are saying this is an isolated problem on tear end. >> what did we see this week? gold up a percent, equities up a percent. we saw a little bit tomcat me, yes, the vix is off a very low base. it closed 10%. last 84 it was off seven-year low, earlier, they talked about ties crises situations, how we is rugged them off. those are in a volatile environment. when you think of the different moves we had if an asset class, can you almost say in a slow trading period, maybe it's the start of something. >> the riskoff would be the concern about the correlation of assets, when riskoff happens, what happens? everything goes down towing. pacific, in previous crises, what you saw is equities and crude were positively correlated him everything els fell, that's not what we are seeing. >> at the same time, this is early on. i don't want to turn this into an oil production, what will you see production? >> i think one of the phenomenal things the market has provided for folks over the

we talked about the vix a second ago, the vix is 1072 right now. that is historically low. so the cost of protection is relatively inexpensive. i can go into the s&p 500 futures options pit, by put options against a long futures play or a spy play or something along those lines. get relatively cheap insurance. catch 60% of the upside and protect myself from a nice piece of the downside, if we get some sort of large drawdown. only put options will do a good job of protecting traders. that said, we could be here in a low volatility environment for weeks or months. a 7-year-old mark sebastien in 1985 would have looked at a vix of 8 and said that is perfectly normal, coming out of the post inflationary to october of 1987, if there was a vix at the time, it would have read between 7 and 9, the entire period, a six to seven-year period. we can go through extended periods of low volatility. i think we may be in one of those right now, until there is systemic change in it. david: i've got reveal something about mark, i love mark dearly. he was two years old in 1980 when inflation w

you want to buy the stock market when the vix is high.it is low, it just shows you it is not an optimal mode -- optimum time to put money to work. there are only a few episodes per year or every couple of years when the fix is high. we have had this environment of 2006, 2007. we have liquidity in the market due to the fed. that was a sell signal for a lot of people. >> when the vix initially spikes, that is when people start getting out of positions. >> you think that is a buying opportunity? >> when it has, for a couple of weeks or months, then it becomes a buying opportunity. >> i know you do not like the homebuilders because you are bearish on the economy or it is slower than what people expect. you are looking at homebuilders, john. >> your explanation makes sense. and i look at these markets a look at the homebuilders track on the s&p 500, we have already traded lower. i ask you on a guy that is short, as that ship sailed? do you think we can go lower? >> the homebuilders are interesting. they are doing half the revenues they were do

when you see this left of inactivity, the options market, which is what the vix is basically tellingt things you'll here morened and more investors talking about ways to hedge their vote -- when the vix is this low on a relative basis, that means that protection, insurance if you will, on your portfolio, is downright cheap. that may be a theme you see developing. >> kenny, weigh in on that, if you will. 17,000 is that big round number, but it's a number the bulls will make a run at. >> i don't expect it's going to be balloon falling from the ceilings and bells and whistles. i think they'll make a run at it, it's going to hit some resistance and the market will back off a bit. look at the chart on the dow or the s&p. it's just a straight line up. almost parabolic. >> no real pull backs. >> so therefore, like we say, it's the most hated rally ever, but at some point it's going to hit some resistance and people will start to think about where are we based on fundamentals, versus what the market -- versus what the fundamentals are telling us. >> gentlemen, thank you. good to see you, as

the vix trickled down. the vix has been at seven. there is room to go lower. i don't know it will reach all the way down there. this is complacency in this rally, if not volume. david: lindsey, i haven't seen you since you became chief economist. congratulations for that. what did you make of the job figures. >> thank you very much. it certainly was a impressive number. fourth consecutive, plus 200,000 non-farm payroll we had. we captured the prerecession high in terms of job creation. i'm a little concerned about the composition of the number. we're seeing a good number of part-time, temporary and low-wage job positions being created which sort past reason we're not seeing this headline number translate into wage pressures which is needed in order to robust, to lead to a robust increase in consumption and propel us above the 2% gdp range. liz: that all sound great and you're not wrong but tom frost, you still believe this is great time to buy stocks. you're not worried. you see positivity here. what makes you so optimistic beyond pretty good numbers and knowi

wall street's so-called fear index, the vix now at a one-year low. so let's get to trading action, such as there is much trading action, bob pisani, there hasn't been much in recent days. >> there hasn't been a lot of volume. that was the subject of the recent conference on exchanges that we had with sandra o'neil just a few days ago. it's not a roaring recovery, tyler, i want to put up the s&p futures. this morning when we got the jobs report, basically in line, there you see 830, that's when the market moved to the up side. it does respond on the up side to the jobs report. maybe 3%, that seems to be good enough for the market. even though we have anxiety, stock's up, bonds up right now. tyler is right s volatility has virtually collapsed at this point. we're at 18-month lows essentially. look at this longer term. this lower period has corresponded with lower rates, higher stock prices and lower volumes. look at this,, going back to 2005. we're essentially where we were in 2007. it's a little steeper if you go out on vick futures, so it's down arou

if you look at the history of the vix, you go back, usee that you had very low levels before several of the market breaks, very low levels when times are good. the vix to me alternates bit reminds you when it's very low that you want the fixes the roof in the portfolio when the sun is hinding. when you look at investor confidence, your other guest is absolutely correct. the stephen-year treasury bond is down around 3%, it was 7 a coupleiers, so investors are not see a lot of risk out there, that's good for in the real economic, if you just want to be careful, because spices can move a bit further around super intrinsic value if you're not careful. you you want to fixing the roof when the sun is shining. >> a lot of people are still putting money in the treasury markets, and that certainly a lot of people think is the no the right trade, so where would you deploy capital? >> yeah, from a multiasset perspective, we think it will be a tough environment for fixed income. we do like equities, because we think the economy will continue to expand. i agree with kevin, you kind of want to bal

so you look at the vix popping a little bit. look at gold popping a little bit. taking this as something the market will digest, but, of course, could escalate. >> watching the vix today, pete, john? >> absolutely. when you're talking about popping, we're only talking about 12. let's be honest. if you go back and start looking at where the vix has been the last year, two years and look at 12 in this area, that is the lowest. yes, were underneath 11 a couple days ago. you can protect, still at these levels, absolutely, for portfolios or put on spreads on something like delta air lines. the airlines are getting hit. that's a great opportunity. you want to have your bets hedged there and have to do some spreads. >> investors over the last 24, 48 hours had to digest things that hadn't bon the radar. no one expecting eric cantor to lose in the way he did or if at all. the situation in iraq, sending the oil market in fits. doc, you have to assess everything here. >> right. i looked at like, for instance, drone stocks like avav or some of the defense stocks but they're

david: but, mark, i wonder if the vix is reactive or proactive? i tend to see it more reactive in the past couple years than proactive, don't you? you. >> know, david, i look at the time to be most fearful is when the vix is the lowest. david: yeah. >> you mentioned -- liz: that hasn't worked, mark. that hasn't worked. >> no, i understand. i don't think in the short run it probably does and hasn't but i would point out in the last 30 years in the industry, wee haven't been able to predict what would cause the market to hiccup hire. whether that is surprise move by the fed, thigh bottom, russian thybot, russian ruble, nothing the participate pants see would happen. david: push back on what patrick is subpoena happening that is so good for the economy. that europe is so bad that draghi has to take these desperate steps to prop it up could be bad for the united states economy, wouldn't you think that, as the at least a possibility? >> david, i would argue we're trying to import what i call euro-sclerosis. david: what do you mean by that? >> you know,

also yesterday, another pullback on the vix. lowest in seven years, a little more than seven years, in fact. andrew keen,w is president and founder of keen on the markets. aboutne is complaining the vix being so low. but you have found that silver lining in the vix being so low. x is contained right now. about every month a goes a point higher. you might say it goes too low, but you could use that as an opportunity to buy some calls against the portfolio. a market has been on fire. it seems like every day it wants to go higher. we are shaking off news from iraq. use that as an opportunity to maybe buy some puts against your position. no one says you have to initiate long positions, but when it is hurricane season in florida, people buy insurance after the hurricane. -- don't you buy it the for? before? having insurance inside makes sense -- insight makes sense. >> your argument is that hedging against or hedging for that sort of event, a pullback, is relatively cheap right now to do. >> absolutely. policiesinsurance against any

. >> what do you think of the vix?o go down, multiyear lows for the vix, volatility index. does it signal anything about the fundamental. >> he doesn't like the vix. >> i think it's a broken instrument. i've said that for years. everybody's talking about complacent si, and the vix reflects that. could be the case. >> surprised at how little effect iraq had on the markets? >> yes, i am. the markets decided, with all do respect to the news media, they monitor the other assets. they are looking at oil. they are looking for confirmation from things like gold and the yield on the 10-year, and if those begin to move, then you may get action. the weekend worry is that isis may move its attention to samara, which is the location of some of the holyist sites of the shia, and if they move in and desecrate the sites, there's high risk that could turn into a regional holy war, bringing in people from different nations in the area. >> what do you think of this? looking at gold here, what do you think of the short covering frenzy ye

>> with the vix at these levels, buying volatility could be a good trade.er, i think if you are in investor who is really concerned about the future of this market, i would use that low volatility as an opportunity to buy relatively cheap and effective putts. what about volatility protection on small caps? >> i think that is going to be where we are going to see a correction start if we get one. we have seeing growth names lead selloffs in this market. if i see those start to look we, i would definitely be looking for some downside protection. >> in terms of asset classes, what would you be looking at as a leading indicator for equities? >> large-cap energy names. other volumes have been relatively thin. belooks like money will looking for those names to move higher through september and august. if i see those names not perform on a good number tomorrow, i will definitely have some cause for concern. somet's take a look at individual companies. shares of siena surging by the most in a year. profits topped analyst estimates. what kind of activity are you see

when you look at vix, it is over 11%, that is a nice insurance hike up in options right now. so, when i look where the vix is pricing, how s&p is moving i think you will see this slow grind up continue. potentially through the 4th of july. who knows, maybe through the whole summer. adam: mark, pick up something you said. i want to go to jason, he says don't worry about complacency. weir seeing real estate investors come in and small caps making a run. is there complacency or is there still a lot of room to go up? >> we think there is some room to go up. like draghi said we are not finished yet or not finished here. valuations are hovering around fair value, maybe a little bit higher. the economy is still growing. the central banks are still being stimulative. we haven't reached a peak market valuations. unless there is cattist that comes about to bring the market back in line -- catalyst. or down to lower levels, this market is more likely to defined e ground higher than it is to falter at this point in time. having said that we're arguing that clients need to be constructive

we have low volume, low vix. that tells us, traders had selling there wasn't a huge pull back, only .6% in the s&p. so no panic selling. a lot of traders thought we would sell off a lot more with the spike in oil. the selloff just didn't come. adam: let me go to randy. you heard him say we have low vix. you think market is up year-end 10% yet you still think investors need to hedge. why? >> i think it would be a wise thing to hedge. we use a volatility hedge per our investors and some of our fund. so, you know, it is pretty smart to hedge your bets a little bit. you don't know what the next catalyst is going to be for the downside. so we don't want to sound like we're overly cautious. because we are optimistic, but, still, it is always good to have a plan when things don't go your way. right now, you know what is in t is happening with oil prices, is causing a lost things not to go the right way. liz: then i take it to tom. tom, where do i put my money so it goes the right way? >> well, liz, you pointed out earli

you know though the vix is a sign that investors are positioned in a way that they're basically not insured against huge amounts of downside and again you know going back to you know the last comment on the way the fed is sort of affecting behavior i think that a lot of that is directly correlated that the fed is you know they have reduced the supply of some financial assets and sort of forced people unwillingly into other financial assets and that's had a very real impact on prices and you know as a result it has the potential to create this environment where you know potentially the market prices become sort of disconnected from their underlying fundamentals and that has you know in a sort of weird way chewy can be destabilizing in a way that the fed doesn't really you know expect or you know can be destabilizing in a way that you know they would would be actually counterproductive to what should be a stabilizing policy in their views so yeah i think that all of those indicators are sort of signs that we're moving into sort of a later stage in the market cycle than really the behavioral c

>> the vix itself is not as complacent as you would think.at nothing has happened until now, but when you dig into it it tells you nothing, just that things have been quiet. we have a much better indicator, the fear barometer. it effectively asks the market to put their money where their mouth is. the market is saying that the upside in the market is sold. we don't think the market is going up there. that means that there is skepticism. where there is skepticism there are people fighting the bull market. you know what you need to get the market to go higher? shorts. continue fromtor here? >> that's what the data tells us, right? tactically on the other side of the market you bet on the market going up and this market has been heated for so long and has given such effectively good odds on the upside relative to what it cost to protect your portfolio, that is what the credit fierce which barometer is telling you, the market says that we dare you to bet on the upside. if there is a bet that is too cheap, that is probably where it will go. >> eve

are engulfing you in your family like i don't hear the smoke detector so must not be a fire so the vix is completely manipulated so it doesn't tell market participants doesn't give them a signal about the true volatility and is just another piece of the overall way that markets are being destroyed to service a few kleptocrat well all of these rigged indexes around the world in price signals i think is a form of chumming it's basically thrown b. into the water it's encouraging the seals a minnow as the little fish and the little chubby humans to get into the market waters to get eaten by the sharks now i for have this tweet here max vick has been sitting near or below twelve for two weeks the last time this happened was in two thousand and seven so everything seems comb the water seems calm so you feel quite confident that it's safe to get into the waters and a swim in the markets right well those markets go higher there's a sense of my people making money in these markets to do it or they can't even if you like the market so that it's easier for them to make more and more money so mone

of five to six months where the vix never breaks 13.ave these slow ground hires, i would not be shocked to see. >> at 10 handle would take us all the way back to the early 2000's. >> that would take us back to 2006 when the vix closed below 10. it points toward typically some sort of turning point. you see some form of long-term volatility. this rally has been incredible. are we at the back half of it? yes. is there an eminent selloff? absolute out. >> how do you play the s&p 500 options on that? >> argan makers are having all kinds of problems. makers having all kinds of problems. 1945 for $52.ly if you consider how much we have moved in the last week, we are trading 1915 last week. now we have moved a $30. if you let the market momentum move, it can give you the opportunity to trade direction without a lot of risk. you have to be able to let the straddle to move. anlet's talk about individual stock the event focused on as well. that would be cost go. they are trading at $117. what is your thought there? >> one of the things i like to

i think the vix bottomed out in the last end of 2006.er when we hit the peak in october of aseven. but the all-time low of the vix was actually, i think was 8.9 or something like that. and that was in 1997, and that bull market went for another 3 1/2 years. i think it's because there hasn't really been so much surprise in the markets. i mean either with the fed policy. most of the numbers are coming out pretty much as expected. there have been risks. i think iraq is holding back what i think would be a faster gauge in the market right now. we're waiting to see whether there's any interruption in that 3 million barrels a day. in the oil. but, you know, outside of that there really hasn't been any surprises, i think, one of the reasons for the low vix. >> how about you, jonathan? 17,000 next? >> 17,000 next, and then it will be 18,000. i think the big story here is that this economic recovery is sluggish, and that's going to cause it to be a longer cycle than normal. and what that means is that instead of this being year five of the seven

the vix makes new lows. it's also well below -- look at this. it's about 20.point. this is vix's futures curve out to february. look at this. 18. that's below the average. people are not pricing a heck of a lot of risk into the new year. >> dan, thanks for that. more options action. check out the website. optionsaction.cnbc.com. these are the tweets everybody sent to our crew. this is for beakers. everyone including david tepper is now bull yiesh. so why sell anything? where is the risk? >> again at the beginning of the show, the trader in me says if everybody is bullish you have to take the other side. you do have the potential for the meltup. i think the risk for this market is in the junk volume. >> do you think zynga is justified or a great buying opportunity for. >> i couldn't say a buying opportunity. i actually think nadel has got a different -- i don't see this. i actually own some calls in here but i don't see this happening. >> karen? >> yeah. >> do you still like bank of america? >> i feel like this is groundhog day. i get that question every day. b

volatility is measured by the vix, which is a common.used as a training the local -- trading vehicle much more. here's the irony of a sentiment indicator. it may not be the contrary an indicator because it has been so widely used. i think other ways to judge volatility are probably more appropriate. there are a lot of derivatives associated with that. as a sign of complacency tied in with investors intelligence or market vein or call ratios, they do tell you we have a lot options right now. >> a lot of optimism. let's welcome in john green from bloomberg businessweek. adam mentioned the president will be taking questions on student at today. student debt loans is a huge issue. it is getting a lot of attention in washington. have you heard any creative solutions about how to deal with this? >> this is as creative as it is for washington. if you want more volatility in -- short of that congress has basically -- congress is basically in stasis and both parties are in the trench warfare waiting for the midterm elections to happen. obama has

the vix, and i've heard this argument, did the vix, what it used to be. heard some people suggest the vix is no longer a good gauge of volatility and fear. like it had been for the better part of 20 years, that the vix does not represent any more the true -- >> why? >> just the way people trade now. differences in etfs and options, and -- just different methods, and sort of mathematics behind the way we trade. >> what we're trying to do a study on that now. we don't have the answer to that. >> but you will. >> well, we're -- it's one of our suppositions is maybe the vix is just not measuring volatility as well as it did at various points in the cycle before this. >> david, jump in. i interrupted you. >> i think if you look at volatility first of all in the bond market i think that the federal reserve's uber dovish policies are helping control volatility and fixed income. then on the equity market i think the problem is that markets tend to rise carefully, and fold much more sharply. because there's no reason not to be putting money into the equity market

the vix is at 12. that's still historically very low. volume is still below normal.'m not happy about the situation with oil going up a bit but i would point out that the overall market is not down much. oil stocks are up quite notably. airline stocks down 5%. i'm sorry, that's a little bit of an overreaction. reason that is happening is, airlines stocks have suddenly become momentum stocks in the last year. they never were before. delta, for example, is up almost 100% in nine months! is that an excuse for profit taking on a day like today? and the high beta stocks now. s&p is up 1%. delta goes up 1.6% on average on a daily basis. so when you get those kind of high beta names, when you get a day like today, they ten to move down a lot more than the overall market. that's a little bit understandable. as of right noe nw though, tyle we've gone 39 days without the s&p more than 1%. 39 days. thanks to my producer for pointing that out. >> that's amazing. that sums it up. 39 days. no move of 1% or more. today the s&p is .8% on the downside. i'm not saying it is trivial. i

jeff, you're saying basically people should forget the vix, which is obviously very low. there's a more sophisticated way of seeing the market. >> this predicts event that goes beyond what we talk about in the vix. it makes sense to buy protection against unusual things. what might those things be? i think there are three concerns that could go beyond the norm. i think gdp is number one. we saw that number, most economists think that was an outlier. it's not going to be repeated. i had an interesting quote from ethan harris, bank of america, merrill lynch. he compared this gdp number to suarez biting somebody on the back in a world cup game. we think it's unusual, it's not going to be repeated. is that true? we'll see. the number two thing is the consumer. you look at rises food prices, energy prices, do they persist? if they do, the consumer is going to weaken. number three, the big enchilada here is inflation. when you look at the black swan index, we saw a spike the day after the federal reserve meeting last week. i think it's because traders are worried the fed could

the vix has come up a little bit, but still below 12 right now.rompting investors to buy more of a hedge, or perhaps replace equity holdings? >> i have not really seen the upside call buying, but what i am seeing is a lot of protective buying, downside put buying, especially in the s&p 500 options market. the call side is saying, in the vix, we are seeing some call buyers. if we do see a downdraft in the market, then the vix will rise and the calls come into play. we are seeing more protective positions rather than opening positions. which i think is very prudent at this point. >> especially given the uneven economic data we got this morning. on individual company news, we are taking a look at nokia. and the price target was raised from nine dollars to $11 by rbc. what is the option straight on nokia today? >> it is pretty stable. this area from eight dollars to $10 has provided significant resistance in the past few months. if you look year to date, the stock has been pretty combustible almost. it is up almost 2.5 times. i think we hold here for

the vix reached new lows. liz: two big auto names. ford included.r. david: look at all indices. we have pretty much even gains. we love when the small and mid-size stocks. we have favorite after on "after the bell." they did almost a full percentage point. a very healthy way to end the week. "after the bell" starts right now. liz: yes, that is record for the books. once again, david, the s&p and dow jones industrials. david: here we go again. it is an extraordinary day. let's go through all the market act shun with

what's interesting is the vix is not sharing the same concern.t the oil markets are saying this is an isolated problem for their market and not for options. >> you say that but this week what did we see? we saw gold up a percent, bonds up a percent, equities down if you thought that could happen. >> we saw risk off play out. >> we saw a little bit. to me, yes, the vix is coming off a very low base. it was up 10%. closed at seven or eight year lows last week. really the chart they ran earlier about these kind of crises situations, how we've just kind of shrugged them off, those are all in much higher vol virments environments. when you think of the moves we had this week, could you almost say in the vom environmel envir are, maybe it's the start of something. >> risk off would suggest you would see the concern about correlation in assets. when risk off happens, what happens? correlations go up and severing starts going down together. in fact, actually in previous crises what you saw was that equities and crude were actually positively correlated.

we've seen the vix way, way down, very little volatility. >> you would have thought the spreads would go no tighter and they tightened them even further. we are in this area of weight a money. beingge amount of money made in asia and japan, high net individuals are accumulating wealth. companies are retaining ernie's -- retaining earnings, very substantial earnings. the weight of money is keeping people in risk and interest rates low and vols low. >> you at the moment are looking at the u.s. continued to outperform and the emerging markets in this part of the world. what is your advice to clients? moneyare taking a bit of away from the developed markets, particularly the u.s. nevertheless, we remain effectively overweight the u.s. market, u.s. equities. are takings, we weight off the u.s. and putting it into emerging markets and into asia and japan. is the fear spike up in the 10-year u.s. has not occurred. i think there are a number of reasons for. the moderate economic growth in the u.s. has been one factor moderating the u.s. 10-year treasury yield. decline in net issuance of u.s.

. >> translation: we will never accept provocations by others under the pretext of positive pass vix that stirring up interests. the speeches made by mr ab, and mr hagel gave me the impression that they coordinated with each other, staging provocative actions. >> richard is a writer and fellow at the school of international studies and joins us from singaore. thank you for joining us. we heard china hitting back at the u.s. and japan. will beijing take further action or was this a face-saving message for domestic chinese audience? >> well, i think a lot of this is basically dash i think it's interesting that you wept off script to -- that he went off script to say these things, he's oem concerned and upset. they probably feel like they are being ganged up op. to a certain extent it's true, they derfe it, because -- deserve it because mostly it's china causing the aggressive actions in the china sea. they are called on is it. >> from the beijing point of view. if tensions were to escalate, particularly in and amongst the disputed territory. are we likely to see action by the u.s., in

we know what the response is to, the geopolitical turmoil, the vix is not sharing the same concern. it seems to me, the oil markets are saying this is an isolated problem. >> you say that, this week what do we see? gold up 1%, bond up 1%, equities down, the s&p, we saw a little bit. to me, yes, the viy closed seven or ache-year lows, so really that chart, those are in higher volume environment, when you think about the moves we had among different asset classes, you could say in a slow summer trading period, maybe it's the start of something. >> the risk off, when it happens, correlation and everything goes down together. you saw equities and crude were positively correlated that time. people were taking everything off the table. everything fell. >> at the same this is early on. i don't want to turn the into an oil discussion, if we see the rebels move into the south of iraq. >> people should be more than they, are actually, i think one of the phenomenal things the market has provided for folks over the course of the last couple weeks is that you have still got a phenomenal opportun

>> the vix is very difficult. it is an al-maliki rum of all the options in the s&p 500.h way to make money. what you generally have is something moving out into the future, volatility for the vix itself. that is on the rise. it, don'tay to play go in and just buy a call. that is a foolish thing to do. >> i want to get to cvs because there is a lot of options activity. what is going on there? >> this is a fund one. -- a fun one. you can look into the minds of some of the smartest traders out there and see what is going on. on the surface it seems like somebody is buying the july 8 straddle. if you look deeper, they are good -- they are spinning off outdoor. they are going to tender shares. it is an odd deal because you have the option to tender all, none, or some of your shares. they are creating short as a means ofks holding himself. i don't see anything major there. nothing related to the supreme court ruling. >> earning seasons begins soon because monday will be the final trading day of the second trading quarter p.m. you have a bullish recommendation for us on apple.

with strong unity in our neighborhoods we can hopefully addressee vixes and displacement going on in our city. ~ also i wanted to introduce a resolution today supported by supervisors john avalos and david campos. it's to find a balance between our city's transportation needs and the safety of drivers, passengers and pedestrians. it's addressing the issue of the rapid increase in the uber lift type vehicleses or transportation companies. the tragic new year's eve killing of six-year old sophia lu but an uber driver and the injuries of her mother and brother is something that is still fresh in our minds. ~ by the incident raised a number of questions about uber and lift type companies also known as transportation network companies or tncs. i believe the term was coined by our public utilities commission a few months ago. i'll have to get used to tncs as the term. but these new types of companies that are providing popular transportation services, i use them once in a while as well, are operating in what i would call a wild west of unchecked industry without any controls and regulation