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VIX soars 12 percent as stocks tank

Chris McKhann (chris.mckhann@optionmonster.com)

Selling in the major equity indexes accelerated into Friday's close, pushing the CBOE Volatility Index up 12 percent.

The S&P 500 gave up 23.67 points or 1.43 percent, to close at 1630.74. The SPX had been in positive territory in the morning but fell sharply at the end of the day, finishing at its session low. It was the first close below the 20-day moving average in five weeks. Resistance remains at 1687, while support is now 1598.

The Nasdaq 100 lost 30.08 points, exactly 1 percent, to finish at 2981.76. It followed the same pattern as the SPX, also closing at its low of the day and below its 20-day moving average. Resistance is at 3053 and support at 2910.

The Russell 2000 fell 10.29 points to 984.14. The small-cap index was in the red almost the entire day and saw several big steps lower in the afternoon, but it is still above the close from the previous Friday. Resistance is at 1008 and support at 974.

The VIX was up 1.77 points, or 12.18 percent, to 16.30--its highest close since April 18. That move was especially strong given that it was a Friday, when the volatility index usually sees relative weakness as weekend time decay gets priced into the SPX options on which it is based.

The VIX futures followed higher, with the June contracts up 0.65 points to 16.05 but now less than the spot index reading, which will likely be even higher today. The July futures gained 0.55 points to 17.10. This boosted the iPath S&P 500 VIX Short-Term Futures Note (:VXX) by 3.26 percent to $19.14.
The option volume in that VXX was strong at 589,000 contracts, led by 342,000 puts. That significantly outpaced the VIX options, which turned over 394,000 contracts, with 224,000 calls.

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