I try to strike a healthy balance between characterizing (“caricaturing” is probably more apt on some days) the equity market as a place where rational, carbon-based individuals meet to determine fair value for stakes in corporate America and something akin to the opening scene in Terminator 2, where hopelessly disadvantaged humans fight a losing war against hordes of machines armed with vastly superior firepower.

As is always the case in life, the truth’s somewhere in-between. The S&P managed to post a small gain for the week (the third in four) despite the clearest indications yet that Donald Trump’s seriously considering a move against Jerome Powell. Stocks’ resilience served as an anchor for a handful of familiar-sounding mainstream media accounts documenting “investors’ capacity to tune out drama,” as one such article put it.

There’s some debate about whether Powell’s ouster should actually constitute a fundamental “event” for equities, but putting that aside it’s important to remember that regardless of the backdrop, equity exposure’s a function in most cases of volatility. Even where that’s not true in a strict sense, it’s conceptually true. With that in mind, have a look at the simple figure below.

As Bloomberg pointed out in the linked article, Friday was the 17th session in a row without a swing of 1% or more in either direction for the benchmark.

What does that tell you about trailing realized vol? It should tell you it’s compressed further. As the daily range compresses, rVol will generally do the same. These kinds of markets are conducive, for obvious reasons, to vol-selling flows, which in turn creates (or can create) a self-fulfilling prophecy.

The figure below shows you 10-day, one-month and three-month trailing realized.

In addition to the steady grind lower in the shorter-term lookbacks (on the range compression mentioned above), note that the three-month calculation is collapsing. You should know why: The “shock” days from April are falling out of the three-month sample.

That latter point (the three-month rolling lookback losing the “Liberation Day” sessions) was part and parcel of predictions for more than $100 billion of equity-buying from vol-control strategies in July. That was contingent on spot staying relatively well-behaved. The absence of close-to-close swings exceeding 50bps in either direction for 17 straight sessions certainly counts as well-behaved.

I don’t know what that buying impulse actually looks like — i.e., I can’t put a number on MTD vol-control re-allocation to equities. I don’t have a model for that myself. But it’s certainly the case that demand from that systematic cohort helped stocks “ignore” the Powell drama so far this month.

“Volatility targeting strategies continue to add equity risk exposure as high realized volatility periods of April continue to fall off the metric,” Citadel’s Scott Rubner said, adding that while “systematic positioning has increased recently,” those cohorts “still [have] room to add given the decline in realized volatility.”

In the same note, he offered a friendly (and by now familiar) reminder: “Volatility is no longer the coach directing plays from the sidelines, it is the star quarterback in the middle of huddle.”

So, coming full circle, you can probably attribute some of stocks’ resilience to the “machines.”