VIX Blasts Off (VXX, XIV, TVIX, VIXY)

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VIX blasts off as fear re-enters the market.

VIX continued its rise today and now has gained more than 20% since its lows ten days ago.

Bouncing off highly oversold conditions and multi year support levels, VIX, the CBOE “fear indicator” has put in an impressive performance, and as oftentimes happens, acted as a precursor to declining stock prices.

Major VIX ETFs power higher:

iPath S&P 500 VIX Short-Term Futures ETN: (NYSEARCA:VXX) gained 5.66% today on increased volatility, renewed fears over Greece and significant weakness in Apple Computer stock.

VelocityShares Daily Inverse VIX Short Term ETN: (NYSEARCA:XIV) declined 5.7% as the inverse ETN suffered losses in response to rising volatility and fear.

VelocityShares Daily 2x VIX Short Term ETN: (NYSEARCA:TVIX) soared 11% as the 2X leverage amplified gains for another day.

ProShares VIX Short-Term Futures ETF: (NYSEARCA:VIXY) added 5.73% for the day.

chart courtesy of www.stockcharts.com

In the chart of VIX, (NYSEARCA:VXX) we can see how it pivoted near the $16 level on February 5th and 6th and then has spiked upwards since.  It also came off significantly oversold levels on RSI and today some of the bearishness in the indicators has been unwound.  The index is now near its 50 day moving average which will act as significant resistance and a break higher would indicate higher VIX prices ahead.

With stocks seemingly entering what could be a measurable or even significant correction, higher VIX (NYSEARCA:VXX) are a likely possibility.

Investors and traders must realize that VIX is not a buy and hold trade and volatility can move rapidly for or against your position.

Bottom line: VIX has had a great run and all indications are that there is more to come.