options mentoring

VIX Futures Remain Stubbornly Backward

On Friday the market rallied 50 dollars, and the VIX sold off 2 bucks...into a weekend.  Then yesterday the market sold of 1 point and the VIX gave away a little more.  Today,  the SPX sold of 35 bucks,  basically the lows of Friday,  and the VIX was up about 2.00 even.  What gives?  Well I think the answer lies in the futures.  While the VIX cash has remained, save .02%, above 20, but managed to fall back into contango relative to the VIX futures and VXV.  The VIX futrures have been trading in a backward state out to may the entire rally.  Today's did not help.

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VVIX Getting Normal Despite High VIX

While the VIX is still around 22,  one index that is starting to move seriously back toward its mean is the VVIX,  the VIX of VIX.  Its finally well below 100 and appears on a mission to reach 90.  Why does this matter?  While VIX on its own is kind of worthless as an indicator (unless one has SPX to compare it to)  VVIX is a great indicator on its own.  When it completely spikes it actually can mean a top.  When its elevated,  like a backward curve it can mean bad thins for stocks.  Well, it appears to be heading toward recent lows.

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Are Oil and VIX Breaking Up

For the last few weeks oil and VIX have had a strange marriage.  When Oil got thwacked, much like SPX, VIX aggressively bid.  Then today happened.  I made note that for how bad the oil selling wass SPX being off 28 handles was a bit of a weak performance.  Additionally I would comment for how bad oil got slammed VIX was even worse.  The SPX gave up most of its win from Friday,  Yet VIX is barely over 24 and well below the 26 it was at Thursday night.  Take a look at the drop in oil form Friday's open to how VIX did almost nothing over that period of time.

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