VIX ETFs Continue To Decline Via Equity Market Rally

VIX ETFs declined on average this past week, with the VIX Index losing 2.86% to close at 12.90, while the iPath S&P 500 VIX Short Term Futures ETN (VXX) lost 5.26% and the VelocityShares Inverse VIX ETN (XIV) added 5.51%.

Fear has continued to leave the marketplace, as good economic data regarding jobs and employment gave the bulls another reason to party. Right now investors appear poised and ready to reach index records, despite a massive decline in equity markets this past Thursday. Still, rising equity markets typically translate to a lower VIX and VIX ETFs, so it is not too surprising that Friday’s 1-1.5% gains for every major index kicked the VIX Index and VIX ETFs down a little further.

From a technical perspective, the VIX Index has a long ways to go to become bullish, as it has to break both of its moving day averages, both of which will likely provide strong levels of resistance. Furthermore, the VIX Index’ MACD and RSI are in negative territory, giving more juice to the bears:

Volatility Index – New Methodology (VIX): Index: 12.90, -2.86%

iPath S&P 500 VIX Short-Term Futures ETN (VXX): -5.26%, 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 (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 (TVIX): -10.12%, 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 (VXZ): -2.47%, 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 (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.

S&P 500 Dynamic VIX ETF (XVZ): -.61%, This ETN is designed to track volatility in the markets as measured by the S&P 500 Dynamic VIX Futures Total Return Index. The S&P 500 Dynamic VIX Futures Total Return Index seeks to combine results of volatility of the S&P 500VIX Short-Term Futures Index Excess Return and the S&P 500 VIX Mid-Term Futures Index Excess Return to create an accurate market volatility reading, as measured by the CBOE. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets.

Velocity Shares Daily Inverse VIX Short-Term ETN (XIV): +5.51%, This ETN is designed to inversely track the 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 traded on the CBOE. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets.

Bottom Line: Equity markets are charging right now, thus kicking the VIX Index deeper into the ground.

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