VIX ETFs Confused On Flat Day
VIX ETFs finished confused after a flat day of equity prices
VIX ETFs and the VIX Index finished mixed and confused today after suffering enormous losses last week. The VIX Index gained 2.38% in a correction to close at ’15.50,’ while the iPath S&P VIX Short Term Futures ETN (NYSEARCA:VXX) lost .87%, and the VelocityShares Inverse VIX ETN (NYSEARCA:XIV) gained .76%.
VIX ETFs were likely involved in slight corrections today, considering the VIX ETF bloodbath last week. Furthermore, equity markets finished flat today, which did not appear to yield any firm fear or lack thereof to move the index one way or another. With the onset of the fiscal cliff in just 35 days and the continued Greece drama, investors and the VIX have every bit to fear unless Congress and European lawmakers can punt once again.
From a technical level, the VIX index and the VIX ETF (NYSEARCA:VXX) are still in oversold levels as indicated by near ’30′ RSI readings, so a rise should be on the horizon. For the inverse VIX ETF (NYSEARCA:XIV), the RSI has indicated extremely overbought levels with an extremely low 32.78 reading. So, from a technical level, VIX ETFs should react in our favor any day now.
VIX ETF Update:
Volatility Index – New Methodology (VIX): Index: 15.50, +2.38%
iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX): -.87%, This ETN is designed to track volatility in the markets as measured by the Chicago Board Options Exchange Market Volatility Index (CBOE Index), a popular measure of the implied volatility of S&P 500 index options. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets. The iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX) prices itself off of the average and implied volatility of the first two months of futures contracts of the S&P 500 Index.
VelocityShares Daily 2X VIX Short-Term ETN (NYSEARCA:TVIX): -5.08%, This ETN is designed to track 2X return on volatility in the markets as measured by the S&P 500 VIX Short-Term Futures Index. The S&P 500 VIX Short-Term Futures Index measures the volatility of the S&P 500 Index via futures contracts as traded on the CBOE. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets.
iPath S&P 500 VIX Mid-Term Futures ETN (NYSEARCA:VXZ): -.03%, This ETN is designed to track volatility in the markets as measured by the CBOE Volatility Index futures contracts. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets. The iPath S&P 500 VIX Mid-Term Futures ETN (NYSEARCA:VXZ) is priced from the average volatility of the 4th through 7th month futures contracts of the S&P 500 Index as traded on the CBOE.
S&P 500 Dynamic VIX ETN (NYSEARCA:XVZ): +.02%, This ETN is designed to track volatility in the markets as measured by the S&P 500 Dynamic VIX Futures Total Return Index. The S&P 500 Dynamic VIX Futures Total Return Index seeks to combine results of volatility of the S&P 500VIX Short-Term Futures Index Excess Return and the S&P 500 VIX Mid-Term Futures Index Excess Return to create an accurate market volatility reading, as measured by the CBOE. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets.
Velocity Shares Daily Inverse VIX Short-Term ETN (NYSEARCA:XIV): +.76%, This ETN is designed to inversely track the volatility in the markets as measured by the S&P 500 VIX Short-Term Futures Index. The S&P 500 VIX Short-Term Futures Index measures the volatility of the S&P 500 Index via futures contracts traded on the CBOE. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets.
Bottom Line: VIX ETFs and the VIX Index finished mixed today alongside flat equity prices. With the daunting fiscal cliff and a still stubborn Greece, it almost appears that the VIX should most definitely go up from here.
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