CBOE VIX Volatility Index falls further below 10 as stocks surge.
The CBOE VIX (NYSEARCA:VXX) declined on Friday, as US stocks rose to fresh records in the latest sign that the bull market was alive and well.
The Chicago Board Options Exchange (CBOE) Volatility Index fell 3.9% to close at 9.51, where it approached its lowest level in more than two decades. The so-called fear index traded between 9.50 and 10.14 on Friday.
A VIX reading below 20 points to underlying calm in the market, with readings below 10 generally associated with bull market conditions.
The S&P 500 Index (NYSEARCA:SPY) advanced 0.5% on Friday to settle at new record highs.
Major VIX ETFs:
iPath S&P 500 VIX Short Term Futures ETN: (NYSEARCA:VXX) Designed to offer exposure to the S&P 500 VIX Short Term Futures Index Total Return. The Index uses CBOE Volatility Index futures by way of a long position in the first and second month VIX Futures contracts. VXX declined 1.7%.
VelocityShares Daily Inverse VIX Short Term Futures ETN: (NYSEARCA:XIV) Designed to track the inverse daily performance of the S&P 500 VIX Short Term Futures Index. XIV advanced 1.9%.
ProShares Ultra Short Term VIX Futures: (NYSEARCA:UVXY) UVXY is designed to deliver 2X (leveraged) returns of the day’s moves in the S&P 500 VIX Short Term Futures Index. It tacks the two front months of the futures contract. UVXY declined 3.7%.
VelocityShares Daily Short Term VIX Futures ETN (NYSEARCA:TVIX) TVIX is a leveraged VIX ETN designed to deliver 2X the returns of the daily S&P 500 Short Term Futures Index. TVIX declined 3.6%.
The Final Word: After a difficult June, US stocks are back on the offensive. The current reading of volatility suggests the bull market is in full swing despite concerns about weak underlying growth and political instability.