Fear Is Here: VIX ETFs Rise (VXX, TVIX, XIV)
Fear is here again as the VIX and VIX ETFs rise over Moody’s, Greece, and lackluster Retail Sales
Fear is back in the markets as the CBOE Volatility Index rose 2.63% today, likely over Moody’s credit downgrades, continued Greece headaches, and a lackluster Retail Sales report. VIX ETFs followed along as the iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX) and the VelocityShares Daily 2X VIX Short Term ETN (NYSEARCA:TVIX) rose over 2.5%, while the VelocityShares Daily Inverse VIX Short Term ETN (NYSEARCA:XIV) declined 3.21%.
The VIX indicator monitors “fear” in the marketplace, so typically when stocks go up, VIX or “fear” drops, and when stocks go down, the VIX or “fear” goes up. Today was apparently full of fear over uncertainty involving Greece and the Eurozone at large. Moody’s downgrades of nine Eurozone nations did not help the ailing continent today, and the EU’s statement that bailout money for Greece was “conditional” likely stoked the fires. Furthermore, lackluster (albeit growing) Retail sales reports did not help matters either. All in all, fear took hold today, and VIX ETFs showed for it.
VIX ETF Summary:
- iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX): +0.76 (2.95%)
- VelocityShares Daily 2x VIX Short Term ETN (NYSEARCA:TVIX): +1.00 (6.18%)
- VelocityShares Daily Inverse VIX Short Term ETN (NYSEARCA:XIV): -0.28 (-3.21%)
Bottom Line: Fear and the VIX plunged yesterday after Greece finally got its act together and passed the austerity vote necessary to receive EU bailout money. However after Moody’s downgrades and lackluster retail sales reports, fear seemed to re-enter the marketplace today. If Europe continues to haggle over austerity measures over the likes of Greece, Italy, Spain, or Portugal, then fear is likely to stay in the marketplace and the VIX and VIX ETFs will likely remain high.
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Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at any time.
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