The VIX and SPY fall at the same time. Don’t get caught up in volatility hidden in a market blind spot.
Something incredibly contradictory is afoot: Major stock indexes are falling, red screens are multiplying, but the CBOE Volatility Index ($VIX) and, by extension, long-volatility ETFs like VXX and VIXY, are actually holding steady or falling. According to classic market logic, when stocks go down, the VIX is supposed to go up. When that relationship breaks…