This Week in VIX and VXN – 9/6/2013

It was a nice beginning of September for stocks as the S&P 500 rose 1.36% and the NASDAQ-100 was up by 1.94%.  Considering this is the month when we are supposed to begin worrying about the stock market it appears the concerns are pretty limited.

VIX was starting to gain some interest from the general public by finishing over 17 at the end of August.  The index retreated by almost 7% to finish the week at 15.85.  Most market observers consider this a low level for VIX.  Since 2000 the average closing level for VIX is 21.60.  The crisis of 2008 definitely helped to push that average up.  So, yes, relative to long term history VIX is low.  VIX should always be thought of in a relative capacity and relative to 2013 VIX is actually a bit elevated.  I was surprised at actually how low the average VIX close has been so far in 2013 when I determined the average using Lotus 1-2-3.  For 2013 the average VIX close is 14.20.  I take this as 15.85, while low over the long term is low, for 2013 it shows there is still some hesitancy as the markets approach the minefield that is September to October.