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VIX and its futures drop as stocks rally

Chris McKhann (chris.mckhann@optionmonster.com)

Major equity indexes were higher at the end of yesterday's session, driving the CBOE Volatility Index and its futures lower again.

The S&P 500 was up 7.25 points to close at 1562.50. It fell to 1548 in the morning and climbed above 1565 with about 90 minutes left to trade. Resistance is at 1597 and support at 1540.

The Nasdaq 100 was up 29.61 points to 2810.07. It was positive all day and traded as high as 2818 just before the bell. Resistance is at 2860 and support at 2731.

The Russell 2000 was up 2.30 points to close at 914.80. It was as low as 900 in the first 30 minutes but then spent the rest of the day climbing.

The VIX fell 0.58 points, or 3.87 percent, to 14.39. It touched 16 in the morning and then slid all day, with the exception of a bump at the closing bell.

The May VIX futures gave up 0.60 points to finish at 15.35, while the June futures fell 0.70 points to 16.10. That left the iPath S&P 500 VIX Short-Term Futures Note (:VXX) down 2.2 percent to $19.99.

Only 259,000 VIX options changed hands yesterday, with 180,000 calls. The action must have been largely selling, as the VVIX Index--which measures the implied volatility of those options--was down 4.8 eprcent to 90.91. The VXX options again had better volume that those of the VIX, with 320,000 contracts led by 180,000 puts.

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