CBOE VIX moves sharply higher even as stocks rise.
The CBOE VIX (NYSEARCA:VXX) moved in the same direction of stocks on Wednesday, a rare occurrence for the volatility gauge.
The Chicago Board Options Exchange (CBOE) Volatility Index spiked 11.5% to 11.97, on a scale of 1-100 where 20 represents the historical average.
Relative strength has spiked above 50, a sign volatility was slowly making its way back into the picture. However, price action remains weak, with the 20-day simple moving average continuing its downward path.
The large-cap S&P 500 Index (NYSEARCA:SPY) advanced 0.5% to a new record high on Wednesday.
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 advanced 3.1%.
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 declined 3.8%.
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 advanced 5.7%.
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 advanced 6.1%.
The Final Word: Volatility is unusually low by historical standards, but is showing early signs of returning. The volatility gauge moves in the opposite direction of the S&P 500 most of the time.