NetApp Takeover Rumors Stir Options Pot

VIX

By Chris McKhann, analyst at OptionMonster.

The VIX(VIX.X Quote) has broken down below 40 for the first time since Oct. 1.

The S&P 500 is up 1.5%, breaking up through 904. Its volatility index is down 5.4% to 39.40 and falling. The January VIX future is down almost as much, sitting at 42.53, while February is at 44.05.

As I mentioned yesterday, this structure is bearish for the SPX. It is difficult to know how much credence to give this "signal" with the VIX so high, but we did see a similar structure exactly one year ago when the SPX was up near 1500.