This Week in VXST – 8/1/2014

VXST spiked higher on Thursday and remained at elevated levels to end the week up just over 60%. At the height of people hitting the panic button on Thursday VXST rose to 19.99. On Friday, when a second leg down in the S&P 500 appeared to be on the horizon, VXST managed to climb into the 20’s for the first time since the Friday before Ukrainian elections back in March of this year.

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A lot of what I see this weekend in the volatility space indicates near term there is an expectation that the S&P 500 may try to recover to higher levels, but some longer term concerns. Checking the closing term structure on Friday the near future contract closing at about a 1.50 discount to the index shows near term volatility traders pointing to the S&P 500 at minimum not following through much more from this past week’s price action.

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