Yesterday was a serious test: ?was the market going to completely give it away, or was what we saw today the bottom. ?In clear order, it seems that, all other things being equal, we hit a bottom on Friday. ?Watching the relationship between S&P and VIX intraday, ?one could see earlier in the day, even as the SPX was hitting new highs, the VIX was climbing. ?We quickly sold off. ?
LivevolX (r)?www.livevol.com
However, we can see that once the market found its footing that while the SPX didnt hit a new high, the VIX got completely torched. ?When we see price aciton in VIX like that it almost always means that there is going to be some carry forward from the action associated with it. ?Thus, while I do not think we are going to hit new highs, I think there is a strong chance that the market ends up back above 1850 heading into Easter.
That being said, I think there is a good chance that vol and VXX are not going to play very nice until things settle down in Ukraine.