Trader sentiment has officially come full circle following the election. On November 1, we observed that "Investors Are (Over?-)Prepared For Election Volatility". Our evidence was that the 9-Day S&P 500 Volatility Index (VXST) was trading at near-record levels relative to the 1-Month Volatility Index (VIX). At its peak, the VXST/VIX Ratio would hit 1.35. That marked the 2nd highest reading in the VXST's 3-year history, trailing only August 21, 2015 (when the S&P 500 was essentially crashing). We thought this reading to be quite odd considering the rather pedestrian decline in the market. As they often temporarily do, these traders indeed got the short-term volatility they were looking for (if only overnight on election night). But that volatility vanished as quickly as it arrived.

On November 11, 2 days after the election, we wrote a post titled "Traders Breath Unprecedented Sigh Of Relief Following Election". The impetus here was the fact that the VXST/VIX ratio, as well as the VIX/VXV (3-Month VIX) ratio, each saw their largest daily drop ever on the November 9 election day. In other words, traders had seen their relative comfort level improve faster than any other date in history.