VIX ETFs Stuck In Mud

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VIX ETFs continue to drag along recent levels, despite a 1% drop today

fear girl1 VIX ETFs Stuck In MudVIX ETFs and the VIX Index continue to drag in the mud, despite a 1% decline (1% is small for the VIX) today for the VIX Index.  The VIX Index declined .96% to close at ’13.42,’ while the iPath S&P VIX Short Term Futures ETN (NYSEARCA:VXX) lost 2.11% and the VelocityShares Inverse VIX ETN (NYSEARCA:XIV) gained 2.06%.

VIX ETFs and the VIX Index, although they did move today, appear to be stuck in the mud alongside equity markets as investors decide whether to punch through heavy resistance or fall back into bearish territory.  From a fundamental perspective, the VIX Index and VIX ETFs face serious headwinds if equity markets do explode and go bullish, as bullish equity markets likely means less fear and lower VIX prices.  Likewise, if the upcoming Congressional battles regarding the debt ceiling and sequestration get ugly, the VIX will likely have plenty of horsepower to get back into the game.

From a technical standpoint, the VIX Index still has a -.320 MACD and a flat RSI, so it is unlikely that the bulls will strike anytime soon, unless of course outside forces such as Congressional actions stoke investor fear.  And, the VIX Index and VIX ETFs have their 50 and 200 Day Moving Averages to break through, so any semi-permanent bull market is likely out of the picture for a while.

VIX ETF Update: 

Volatility Index – New Methodology (VIX): Index: 13.42, -.96% 

iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX): -2.11%, 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): -5.10%, 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): -.52%, 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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