The VIX Holds Above 30...Again

by Jay Pestrichelli on October 12th, 2011

The VIX defends the 30 level one more time today. An index that tracks the implied volatility of the S&P 500, the VIX, is used as a measurement of how volatile the market is considered to be. The higher the VIX goes, the higher volatility.
30 is typically the level considered to be the divide between volatile and not. The VIX has been over 30 now since the first week in August and today was the 4th time that the VIX has beat back the 30 handle since going above it on August 4th. Those dates are Aug 17th, Aug 31st, Sep 15th and today, Oct 12th. Each time the VIX ran up back over 40 and even as high as 46 on Oct 4th.

When the S&P 500 reached its highest point this afternoon at a much discussed resistance level of 1220, the VIX dipped to 29.80, but once again the last half the market day proved to be the most dramatic and the VIX rebounded to close over 31.
Will this be the time when the VIX finally breaks through the 30 mark and return to its historical average of the low 20’s? It seems that is entirely dependent on the situation in Europe, or should I say, the perception of the situation in Europe. Based on volume and open interest levels the options market is showing a lot of reason to believe the VIX will stay in a trading range between 30 and 50 through the next week when the near-term VIX options expire on October 19th.

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