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VIX below 15 as stocks extend rally

Chris McKhann (chris.mckhann@optionmonster.com)

Equity indexes continued their September rally yesterday, extending their winning streak to six straight sessions as the CBOE Volatility Index fell below the 15 level.

The S&P 500 rose 12.28 points, or 0.73 percent, to finish at 1683.99. It closed just off the highs of the day and broke through resistance at 1680. It now has resistance at 1700 and support at 1630.

The Nasdaq 100 climbed 15.14 points, or 0.48 percent, to 3185.07. That was yet another new 13-year closing high. The NDX has support at 3100.

The Russell 2000 gained 9.65 points, or 0.92 percent, to end the session at 1055.72. That was its best close since its all-time high of 1063.01. Support is 1000.

(When equity indexes are at highs, further resistance levels are obviously projections not based on previous trading patterns, so I will refrain from listing them.)

The VIX lost 1.10 points, or 7.04 percent, to 14.53. That was just off the session low and its lowest close since Aug. 23. As the VIX was falling, the actual volatility of the SPX continued to climb, with the 10- and 20-day historical volatility levels both above 11 percent.

The VIX futures declined along with the spot volatility index. The September futures lost 0.65 points to close at 15.15, while the October contracts fell 0.45 points to 16.35. That had the iPath S&P 500 VIX Short-Term Futures Note (:VXX) down 3.7 percent to close at $14.94. 

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