VIX subdued despite S&P 500 pullback

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Equities continued to drift lower yesterday, but volatility remained subdued.

The S&P 500 declined 0.38 percent to 1690.91, its third straight drop and second consecutive close under 1700. It also dipped below its 10-day moving average, which could suggest a potential weakening of bullish momentum. The index bounced around the same 1687 level where it peaked in May and has further support at 1670.

The Nasdaq 100 was the strongest of the three major indexes we track, shedding just 0.11 percent to 3118.69. Support remains at 3030.

The Russell 2000 small-cap index led to the downside for the second straight day, falling 0.74 percent to 1044.34. Support is at 1020.

(When equity indexes are at highs, further resistance levels are obviously projections not based on previous trading patterns, so we will not guess at them here.)

The CBOE Volatility Index rebounded 2 percent to 12.99 but surrendered most of its earlier gains. The VIX and S&P 500 usually move in opposite directions. The iPath S&P 500 VIX Short-Term Futures Note (:VXX), which is based on the two nearest-month VIX futures contracts, rose 1.1 percent to $14.64.


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