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While the VIX has been mostly stable the last week (something I currently am bemoaning), VXX is actually down from Friday’s close.
Why?
Well hold on tight for some simple VIX curve talk that
The December future is mostly flat as well, this is usually the driver of VXX and UVXY dropping.
While the Dec future is flattish, take a look at what has happened to January and February since Friday’s close:
The Blue line is the close from Today.
The Green is Friday’s close.
Notice December is actually Marginally higher.
But Jan and Feb have both dropped SIGNIFICANTLY.
The VIX curve itself has changed shape, from Contango between Dec and Jan…flattish after to…
A entirely standard VIX curve with a relative normal contango.
This is yet another sign of some normalization.
This also does not bode well for VXX and UVXY.
The VIX light is SCREAMING RED.
Your Only Option,
Mark Sebastian
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