The VIX settled at the lowest level in months and briefly had a 13 handle today. Does this mean that all is well and the market is full on risk on? No, at least for now, the market is still carrying a heavy hedge. How can we tell, pretty simple...take a look at the spread between April VIX futures and the VIX cash index. It is almost 4 points wide. That is wide enough to drive a Mack Trukc through the spread.
While the SPX closed well off its lows and the VIX well off its highs, I found it interesting that SPX made the much bigger move. In addition it still managed to close below the Jan 20 close (while not toughing the lows from that day). At this point I think as I look at how equities and vol are moving, VIX looks like it really wants to blow out. Maybe not to 40 like in August, but I think we are going to see an intra day high that might be near levels we saw in January, maybe much higher....certainly higher than where we are today.