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February 27, 2012  Mon 1:46 AM CT

VIX: SEE CHART GET CHAIN FIND STRATEGIES
Friday was yet another odd day for the VIX as the volatility index and its associated futures rose along with the S&P 500.

The VIX finished the day up 3 percent to 17.31, while the S&P 500 gained just over 2 points to finish at 1365.74.

This is unusual because the VIX is usually inversely correlated with the S&P 500 and is relatively weaker on Fridays as the SPX options are repriced for weekend time decay. But the last few weeks have been anything but usual in the land of VIX.

The VIX finished the holiday-shortened week lower than the previous Friday's close of 17.78. The front-month March VIX futures closed the previous week at 22.60, just shy of a 4-point premium over the spot index reading.

Those futures closed at 21.15 on Friday, gaining 4.7 percent on the day. They lost some ground on the week but maintained a 3.84 premium as expiration is now just over three weeks away in this long expiration cycle.

The VIX may seem quite low, and many are throwing around the term "complacency" to describe the index. But the actual volatility of the S&P 500 is less than 8.5 percent in the last 20 and 30 days. So, in my book, it is difficult to say the VIX is complacent when it is still pricing in a full doubling of volatility in the next 30 days.
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