/BONDS: Brean Capital global hd of........>

US STOCKS: /BONDS: Brean Capital global hd of macro strategy Peter Tchir asked,

"Is VIX Going to 10 or 20 Next?" He said the week starts with "global equity

rally (excluding Jpn which had good data) and VIX dropping. There is some hedge

covering and return to risk on" as wknd "passed without any further escalation

with North Korea. Some parts of the admin. tried to dampen nuclear concerns."

- He adds it follows "now 'usual' pattern when facing wknd event risk: of

rallying on Mon. morning when the worst didn't happen. Unlike many of those

prior events, nothing conclusive occurred over the wknd. It isn't like the

French run-offs or French elections: nothing was decided over the wknd. While

there is a sense of de-escalation, it wasn't until Thu that investors were even

concerned about escalation. If anything, some new potential issues occurred

since the mkt closed on Fri. D.C. is going to be a driver in either direction. I

look at VIX, realized vol., correlatns, VIX fund flows, profit-tkg, VIX call

sprds, prior episodes of VIX spiking (40% Thu: spike.) I come out leaning on the

VIX 20 next side of the equation and think this morning's rally is premature and

an opportunity to de-risk."