With the indexes closing around 2% higher, the VIX slumped, closing 7% lower @ 15.24. Considering the fiscal cliff is yet to be delayed (partly or fully), this is a truly low VIX, and it sure won't stay this long forever.
The VIX remains extremely choppy at these low levels. We'll often see a few hours higher, only to see if smacked lower into the close.
As I have posted for some months, until we see the VIX >20, all index declines are to treated with high degree of caution.
VIX 20+ in December?
My index count is suggestive that sp'1200s are viable in December - although, seasonal factors would strongly argue against such a decline.
If sp'1200s, then VIX will surely finally make a break into the 20s. Whether we'll see the VIX truly explode, into the 30s..even 40s, that is really impossible to guess right now.
If we do see my sp'1425 target met, then I'd guess the VIX will be trading in the 13s.
This remains a bizarre market, a fearless market. The fear will return, its just a matter of when.