Keeping a handle on the XIV is starting to give me gray hair. 2 hours in today and M3 went to a vested status for XIV and it continued strong for the rest of the day closing up 2.5% while the VIX was up 1.5%. Short covering on XIV may have contributed to some of the anomaly and
this piece about the recent behavior of the VIX may help to put things in perspective....without offering any real advice on a tactical solution to profiting from the low VIX dilemma (hint...buy VIX calls, hold your breath).
Keep in mind that the VIX is a measure of CBOE put option open interest and traders' reluctance to place short bets on the SPY (puts) is becoming more evident as with Friday's reading below 11.
Meanwhile, the indices were all marginally lower on moderate volume and narrow range volatility.
The likelihood of a big move in now on the board.....perhaps setting us up for an end of month and/or July 4th rally (historically high odds).
By the way, oil (XLE) was at new highs today (again).
