This is an excerpt taking from MACRO BRIEF: Risks of Volatility Suppression published on March 2, 2019.
2019 is beginning to feel a lot like Q2-3 last year when the markets just tend to float with market participants selling volatility on declining rate of change in volume.
However, we're in a precarious position as speculative net-shorts on the VIX hit an all-time high. With that being said, something significant is needed in order to break the complacency - like a forced repricing of growth, inflation or earnings expectations.
Both volatility and "vol of vol" VVIX are nearing YTD lows. The TACVOL score for VIX remains bearish with the range bottom 11.68.
Below 12, we'd look to get bullish on volatility.
Additional charts associated with this blog post can be found here: https://bit.ly/2Z7FHEJ