VIX Pop

I heard on TV all day that the VIX peaked "right where it did in August". Which is apparently "awesome, baby", as Dick Vitale would say.

OK, maybe we bottomed. But this VIX thing is a tad overstated. It is a statistical calculation based on a batch of SPX options quotes. Best I can tell is that the VIX flipped up to 37.40 for 1 minute, at about 9:40 in the morning as stocks were still opening. By 10 AM it settled down to 33.50. By 10:30 it was 31ish, and stayed there for the rest of the day.

I think to call this some sort of cosmically important moment in VIX-dom, we would need it up here a bit longer. It just seems more like a vacuum of wide option quotes than anything else.

And I would wonder what more evidence do you need of at least a temporary low than the market itself? I mean we now have levels below here that are support, until proven otherwise. Using "hey, the VIX exploded for a minute" as a confirming factor seems kind of dangerous to rely on.

As Nick at Schaeffers often reminds me, an indicator is most noteworthy when it diverges from expectations. Like the VIX of last week that did nothing while the market tanked. Volatility (very briefly) going bananas as the market gapped down huge is not particularly remarkable.