A Flash ‘Surge’ In the VIX? Not so Fast

As reported by ETF Trends’s Paul Weisbruch, the equity markets suffered further losses Monday after feeling under enormous selling pressure late last week, capitulating at one point during Friday’s session when the S&P 500 Index traded as low as 1168.09.

For most of the trading session on Friday, equities traded in the red (with the Dow closing higher after eking out a gain) and at one point, with equities trading at their lowest levels since late November of last year,  we actually saw the VIX (CBOE S&P 500 Volatility Index) leap fiercely and suddenly, trading as high as $39.25. This was the highest intraday price point touched in VIX since May of 2010 (during the week of the Flash Crash).

But on Friday, this was not an isolated event, as VIX related ETFs and ETNs also traded briefly (we cannot overemphasize the word “briefly” here as it lasted not minutes but more like seconds. For further explanation, please refer to any intraday chart for the VIX or related ETFs and ETNs) at extreme levels, not only on an intraday basis, but on a recent historical basis relative to levels the markets are used to.

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