VIX ETFs Tumble

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VIX ETFs and the VIX Index tumbled back to 16 today after positive economic news and equity market correction

fear girl1 VIX ETFs TumbleThe VIX Index and VIX ETFs crashed and burned today after the release of more positive economic news and equity market correction.  The VIX Index crashed 10.27% to close at 16.69 while the iPath S&P 500 VIX Short Term Futures ETN (NYSEARCA:VXX) lost 8% and the VelocityShares Daily Inverse VIX ETN (NYSEARCA:XIV) gained 7.78%.  More importantly however is the fact that the VIX has once again penetrated its 200 Day Moving Average just days after it broke through its 200 MDA a few days ago.  Again, the VIX Index and VIX ETFs seem caught up again in the 15-17 zone, despite the strong floor of support suggested yesterday for the Index.

The VIX likely tumbled in response to a slew of positive economic reports released today, and the fact that the Frankenstorm is now over, despite all of the damage inflicted on the Eastern seaboard.  Moreover, the VIX likely tumbled in response to the rise in equity markets, as equity markets rose over 1% today in a likely correction from Hurricane Sandy lows and week technical support.  Where equity markets go from here will have a large affect on VIX performance here on out, now that the Frankenstorm has more or less cleared.  With elections just next week, we could be facing a possible bumpy ride.

VIX ETF Update: 

Volatility Index – New Methodology (VIX): Index: 16.69, -10.27% 

iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX): -8.00%, 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): -9.87%, 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): %, 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.

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