Volatility comes back as SPX ends streak

Chris McKhann (chris.mckhann@optionmonster.com)

The CBOE Volatility Index rose yesterday as major stock indexes fell, ending a seven-day winning streak for the S&P 500.

The SPX was down 3.74 points to close at 1552.48. It was briefly positive in the morning and below 1549 with 90 minutes left to trade before finishing in the middle of that range. Support is at 1525 and resistance at 1565.

The Nasdaq 100 dropped 11 points to close at 2800.80. The NDX was in the red all day, hitting its session low of 2788 before noon. Resistance is at 2846 and support at 2760.

The Russell 2000 fell 2.25 points to close at 940.26. The small-cap index hit 942.75 in the morning, a new intraday high. It has support at 918.

The VIX climbed 0.71 points, or 6.14 percent, to 12.27 as it rebounded from Monday's six-year low. It had been as high as 12.93 yesterday when the SPX was at its session low. The two indexes usually move inversely.

The VIX futures followed higher. The March contracts, which have a week left to trade, gained 0.25 points to finish the day at 13.25. The April futures rose by the same margin to close at 14.70. This pushed the iPath S&P 500 VIX Short-Term Futures Note (:VXX) up 1.2 percent to 20.98.

The VIX options turned over 460,000 contracts, with 292,000 calls. The VVIX Index, which measures the implied volatility of those options, suggests that this was largely buying as it gained 3.45 percent to 79.99. More than 373,000 VXX options traded, 209,000 of which were puts. 

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