Calamos' Joe Cusick on September's 'elephant in the room' for traders

Market Sentiment & Risk Assessment - The market exhibits complacency, with the VIX (volatility index) at low levels, raising concerns among hedged equity strategists [3][4] - Institutions are hedging positions extensively, buying puts, and engaging in put spread activity, particularly in the energy sector, indicating underlying uncertainty despite all-time highs [7][8] - Market participants believe they can quickly exit positions if an event occurs, contributing to the "full speed ahead" mentality [6] - Seasonality into September is noted as a potential factor influencing market behavior [7] Retail Investor Influence - Retail investors are increasingly driving market moves, indicated by rising option volumes through retail shops and speculative moves into unloved stocks [9][10][11] - Retail investors are using hedged equity strategies, such as put spreads in the S&P 500, reflecting growing uncertainty [8] Mispricing & Volatility - Mispricing and volatility exist between implied and realized market movements, with the market seemingly unconcerned about potential impacts from events like Fed-related news [2][3] - The VIX, a measure of options pricing, is not indicating nervousness, despite underlying concerns about complacency [3][4]