S&P 500 finally breaches resistance

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The major equity indexes finally broke higher yesterday, but the CBOE Volatility Index was up as well.

The S&P 500 gained 8.31 points, or 0.56 percent, to close at 1480.94. It was a few points off the session high but a new five-year closing high. We have finally regained the losses of 2008 and are back to levels first hit 13 years ago. The SPX broke through resistance and has first support now at 1450.

The Nasdaq 100 was up 12.42 points to 2747.15. It remains well below the highs of September and ended the day below last Friday's close. Support and resistance remain at 2670 and 2785 respectively.

The Russell 2000 climbed to yet another new all-time high. It finished the day at 890.36, just off the afternoon high of exactly 891. In contrast to the SPX, the RUT was down around 600 back in 2000 and hit a high just above 850 in 2007. The first level of support is now 860.

Despite the gains, the VIX was up 0.15 points, or 1.12 percent, to 13.57. The volatility index hit a low of 13.16 about an hour into the session but finished just off the day's high. The VIX may seem low, but it is still more than twice the level of the actual volatility of the SPX, which has a 10-day historical volatility reading of 5.6 percent.

The VIX futures were mixed. The February contracts were up 0.15 points to 15.65, while the March futures lost 0.05 points to close at 17.05. This had the iPath S&P 500 VIX Short-Term Futures ETN (:VXX) fractionally higher to close at 25.63 after hitting a new lifetime low of 25.05.
 
The VIX options turned over 538,000 contracts, led by 372,000 calls. The VVIX Index, which measures the implied volatility of those VIX options, was up 2 percent to 78.77 but still just off its lows.

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