Bonds and Stocks Going Down Together

An interesting thing happened on Thursday and Friday last week, which hasn't been common this year.  Both the stock market and bond market sold off.  While the drop in stocks isn't that much, the VIX has gotten perkier, going above 11.  The selloff in bonds wasn't trivial, the 30 year sold off 11 bps in 2 days, which is a large move these days. 

Bonds and stocks going up together is quite common, and so are stocks going down and bonds going up, or stocks going up and bonds going down, but both stocks and bonds going down is pretty rare.  I don't have the numbers this year, but I don't recall bonds going down this hard while stocks were also down.  In 2015, both bonds and stocks going down together was more common, as stocks topped out ahead a vicious correction in August-September, and then again in January 2016. 

Just another straw on the camel's (bull's?) back. 

We have VIX trading higher again this morning, and with the S&P hardly down on the day.  The long side seems saturated and the VIX sellers are feeling some pressure.  There is subtle sell pressure across asset markets, and this is something new for this market. 

On a side note, with CME announcing they will be introducing bitcoin futures later this year, I have noticed the extreme volatility over the past few days.  It reminds me of the volatility in late 1999 of the dotcom bubble.  Also the talk on social media has changed from calling it an outright bubble this summer, to more of an acceptance/belief of blockchain as a revolutionary technology.  Seems like bitcoin too is nearing its final legs of a bull market, although I do believe it will top out after the S&P, not before it.