This Week in VIX and VXN

Due to the market strength seen on Friday the S&P 500 rose 1.7% while the NASDAQ-100 was up 1.1% on the week. Do keep in mind the S&P 500 gained 1.9% and the NASDAQ-100 was up 2.4% on Friday. Because the equity markets were down earlier in the week both VIX and VXN were higher. The market rallies on Friday were not enough to result in lower volatility indexes on a week over week basis.

The price action along the curves was sort of interesting with contracts mostly lower. The exceptions were flat performance for Dec and Jan VIX futures contracts. Most market participants like to focus on the level of the VIX (or VXN for the NASDAQ-100). I like to also look at the price action of the futures along with their levels relative to the indexes. Lower futures this past week tell me the market is pricing in a bit less fear over the next few months. Time will tell if the higher volatility or lower futures are the better indicator this time around.

If you have interest in the VIX options, Exchange Traded Notes, and Exchange Traded Funds I posted a review of those markets last night –