This Week in VIX and VXN

Despite finishing in the green on Friday, both the S&P 500 and Nasdaq-100 were under pressure last week losing more than 2%. The volatility results were mixed and of interest last week.

First, for the first time in 2012, the VIX curve went into backwardation last week. It was brief and did not last too long. The best example was Wednesday when VIX closed at 19.08, November futures at 18.85 and December futures at 19.15. During the day the November discount was a bit more pronounced, but Iā€™m counting that as backwardation on the close.

Another thing to note is what VXN did last week. NDX was down 2.7% and VXN was down on the week as well. Near term volatility appears to have dropped as earnings season is now behind us and no new product introductions from the big technology companies that contribute heavily to the NDX performance are on the horizon. Futures were higher which may be more of an indication of risk for the NDX in the next few months.

If VIX Optoins and ETPs are more you cup of tea – a review of trading in those areas is posted below at the following link –