VIX collapse

In an interesting turn, the CBOE Market Volatility Index (VIX) broke thru 11 to the downside today.  I believe that is a fresh 52 week low . . . Indeed, multi-year low.

I am not sure exactly what to make of this — since April 2003, the VIX has been in a solid downchannel, with only sporadic pops to the upside.

I may have to look into this in greater detail — next week.

The head of my option desk noted:

"Given the lack of any significant movement in the market, up one day, down the next day. The overall market is trading in a very tight range. Vol’s in general in all sectors has came in, especially banks, staples, utility and financial. The two sectors that has hold its value in term of vol’s is in tech, transportation and maybe the pharmaceuticals."

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