It was another day of swings for the US equity market, and the VIX was naturally all over the place, with an early low of 21.44, but settling +12.2% @ 25.22. The daily candle was of the bullish engulfing type, and bodes for higher levels of volatility into the long weekend.
It is highly notable that whilst the sp' hit 1901 on Monday - with VIX 27.39, despite the sp' @1886, the VIX only hit 26.11 today. In the scheme of things, this is only a minor divergence, but those equity bears holding short should be mindful of it.
Despite a 3.2% downward swing in the sp'500 today, the VIX did not provide any hyper upside. In many respects, it is surprising that the VIX didn't explode into the 30s.
In any case.. whether or not the market can rally into the next FOMC of Jan'27th... VIX 30s and 40s look due in the coming weeks.
Whether we'll see 50s.. or even 60s in the late spring/early summer difficult to say. It will largely depend on whether the market sees a gradual decline.. rather than a 'Sunday night surprise'.. - resulting in a giant gap lower - as we saw on Monday Aug'24th 2015.
more later... on the indexes