VIX is having bouts of self-doubt about halfway through the day the last couple of days. The 13 handle is acting like kryptonite which repels all VIX declines. The SPX is in such lofty territory that any pullback is taken as a sign of worry.
One thing I like to scan for is what stocks and indexes are hitting 52 week IV lows. Today, I was surprized to see the RUT on that list. The RVX (the VIX of RUT) touched a 52 week low today. While that on its own is not that interesting, the fact that the VIX is over 2 points above its 52 week low is certainly interesting and might be informative. Take a look at the returns for the VIX and RVX over the last year:
The VIX settled a touch below 13.70% today. Its lowest settle since early December. The VIX futures on the other hand are no where near that level. Take a look at the curve as its stands now. Notice the GAPING whole between cash and VXH5
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While the general media might be excited that the DJIA is now up on the year, I think the more concerning subject should be that IV is still massively up on the year as well. In fact, looking at the SPX one can clearly see that it has essentially done NOTHING, yet IV30 (Livevol's VIX) has been going up and up and up.
The OIV (the WTI VIX) settled at a new recent high at over 64%. That is a MASSIVE move and points toward something really unsettling going on in the WTI contract. The last few days the commodity has started to move around again, and I believe there is a chance that the underlying could really move over the next few weeks. The question is which direction.
One of the reasons that the market has been so tough for many retail traders is that the volatility has come from a strange place. Take a look at this chart where i have connected down moves and up moves.
LivevolX (r) www.livevol.com