The S&P 500 and NASDAQ-100 finished the week up over 1% each, after being up over 2% on the week. Wednesday’s announcement by the Fed that there will be no tapering brought back images to Kevin Bacon toward the climax of Animal House urging all citizens to remain calm all is well. At some point we may get that sort of reaction, but apparently it is been put off by the Fed.
VIX closed down over 7% on the week and VXN lost almost 12%. VXN went out at a discount to VIX which in normally the result of VIX climbing in anticipation of macroeconomic concerns. However, VIX is not climbing and was even down a touch on Friday despite the S&P 500 dropping by over 12 points. Also, the futures markets are pricing in VXN going back to a normal premium relative to VIX in short order as the October VXN contract went out at a 0.70 premium to October VIX.