VIX drops as equities rally strongly

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Equities rallied strongly yesterday, with the major stock indexes all gaining more than 2 percent. That drove the CBOE Volatility Index down nearly 16 percent.

The S&P 500 gained 36.16 points or 2.18 percent to 1692.56. That was its session high and just off the close of last Wednesday. It surged at the open and then again with about an hour left to trade as optimism about a debt-ceiling deal swept the market. The SPX has resistance at 1729 and support at 1630.

The Nasdaq 100 rose 68.31 points, or 2.17 percent, to 3210.84. It did not quite get back to Tuesday's opening level. Resistance is at 3256 and support at 3050.

The Russell 2000 surged 26.04 points, or 2.5 percent, to close at 1069.50. That was just pennies off its high of the day and just below its close from last Thursday. The small-cap index has resistance at its all-time high of 1087 from last week and support at 1010.

The VIX dropped 3.12 points, or 15.92 percent, to 16.48. That was its lowest close since last Tuesday, the first day of the month. The volatility index is down 22 percent from Wednesday's high.

The move left the index back below most of the VIX futures, which followed lower. The October contracts shed 2.45 points to 16.40, while the November futures fell 1.85 points to 16.85. That had the iPath S&P 500 VIX Short-Term Futures Note (:VXX) down 9.77 percent to $14.77.

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