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by John Nyaradi

Frankenstorm (a.k.a. Hurricane Sandy) sure did a number on the Eastern seaboard and on markets and VIX ETFs, as the VIX Index rose 4.44% to close at '18.60,' the iPath S&P 500 Short Term VIX Futures ETN (NYSEARCA:VXX) rose 1.96%, and the VelocityShares Inverse VIX ETN (NYSEARCA:XIV) lost 2.07%. Are VIX ETFs afraid of Halloween too?

VIX ETFs were already scared before Hurricane Sandy scared them more yesterday, as the VIX Index was ever close to reaching the "average" 20 level. Markets have been declining recently in response to poor earnings and weak technical support, and VIX ETFs have responded in kind by going into the green once more. With the VIX Index having bounced off of its 200 Day Moving Average floor of support, it is likely that VIX ETFs will continue to rise, or at the very least, move sideways. The 200 Day Moving Average will be a tough barrier to break, considering scary Frankenstorm and continued bearish indicators.

VIX ETF Update:

Volatility Index – New Methodology (VIX): Index: 18.60, +4.44%

iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX): +1.96%, 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 (NYSEARCA: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 (NYSEARCA:TVIX): +1.33%, 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.

iPath S&P 500 VIX Mid-Term Futures ETN (NYSEARCA:VXZ): %, This ETN is designed to track volatility in the markets as measured by the CBOE Volatility Index futures contracts. The iPath S&P 500 VIX Mid-Term Futures ETN (NYSEARCA: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 ETN (NYSEARCA:XVZ): +1.06%, 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.

Velocity Shares Daily Inverse VIX Short-Term ETN (NYSEARCA:XIV): -2.07%, 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.

Bottom Line: Frankenstorm scared the VIX and VIX ETFs on Halloween Wednesday after a two-day market shut down. VIX ETFs will likely continue to rise because of scary fundamental and technical indicators.

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Source: Frankenstorm Scares VIX ETFs On Halloween