In VIX we are observing a increase in net positioning although from a very low level but could signs that bigger players in the futures and option markets are preparing for increase in volatility. On the other the forward curve in VIX futures is still not sending any distress signals, but these things change fast and the catalyst may be very subtle.
The rapid rise of the large US technology stocks has catapulted the five largest stocks on market value to reach an index weight of 18%, the highest level observed in the S&P 500 in 25 years. Increased concentration risk is a clear sign of fragility increasing and the system is destabilizing underneath the surface. It’s historically a recipe for violent moves so it should definitely be on investors’ radar.