Little known to me, but there's an AC/DC Economic Indicator out there.
The ultimate sign that we are on an economic highway to hell? Yes, it just may be AC/DC album sales.
The aging Aussie rockers are top of the charts in Britain for the first time in 28 years with their album Black Ice. Alexis Petridis of the Guardian points out that AC/DC's ascents on the U.K. pop charts coincides with declines in the British economy.
The band's biggest album, Back In Black, came out in 1980, with British inflation at 20 percent and unemployment climbing toward 2 million.
And the band's "comeback" album, The Razors Edge, was released in 1990, "just as Britain headed towards its last recession."
On the other hand, The Fixx released "Saved By Zero" in 1983 and if you backed up the market truck then, you won big. And lo and behold, Toyota has revived it in a new ad that airs every commercial break during sporting events. Incidentally, you could have probably slapped on a long U2/short Fixx combo in 1983 for close to even and retired on the royalty spread. Bono now rules the world, the guy from The Fixx is a clothing designer.
But I digress.
There are some sporadic signs actual market volatility is starting to taper. 10 Day HV in the Russell has actually tapered a bit, albeit from 100 to 90. Just to put that in perspective though, this measured roughly a 20 in early September and lifted almost without a break to 100 last week. So still thrombolically high, just a pause in the trend. The same measure has not stopped climbing in SPX, although the dip may be upon us. In order to sustain a 100 HV, a stock/ETF/index needs a 6-7% range. So it can't help but lose some steam.
Remember though that option volatility anticipates this drop already. VIX Nov futures still trading in the mid 50's.
