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VIX Headed Downward?


Most likely, if the SPX holds its gains.

Editor's Note: This post is by Chris Mckhann, of OptionMONSTER.

The VIX has remained in the 35 to 40 range for most of the last 2 weeks, but may break back down through the 35 level again today.

The volatility index was up again yesterday, closing at 38.10 as the S&P 500 fell 0.77%. The May VIX future closed at 38.45 -- just above the spot reading -- while the June and July futures are just below the spot level. This is still moderately bullish, at least until the spot pushes above that future value.

The VIX will probably head back down toward the 35 level if the SPX holds the gains that the futures are showing in the pre-market. The 20-day historical volatility sits at 34.49%, and the VIX will naturally trend toward that value.

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