Both the S&P 500 and NASDAQ-100 continue to grind higher and with a slow grind higher there is complacency in the market. This complacency is quantified by very low VIX and VXN readings. The week over week close for VIX was up 0.01 from 12.89 to 12.90, but that does not tell the whole story. VIX was as high as 14.43 on the week and sort of did a round trip to be back to basically unchanged. The futures contracts ended the week higher with the result being a more pronounced futures curve with consistently higher VIX futures prices out to the October expiration date.
VXN settled the week lower. This can be attributed to the NASDAQ-100 finishing the week up just about 1% along with the end of earnings season and finally some calm in the market known as Apple (AAPL – 453.62). Although VXN was lower, the curve maintains the same sort of shape as the VIX curve. The signal from that is the volatility market expecting the current equity market grind higher may be coming to an end.
Finally, Thursday was the end of January which meant more volume records in the VIX futures arena. January 2013 was a record volume month along with average daily volume setting a record last month. Full details on can be found through the link below –