VIX index (VOLX) retested lows from mid-April yesterday and even managed to briefly trade at the lowest level since February 2020. Today's trading was launched with a big bullish price gap. However, the move higher does not result from an increase in volatility but from contract rollover. VOLX has been steadily moving lower since a pandemic-related spike in March 2020. Periodic short-term volatility spikes have been getting smaller. There are still some risks to the pace of recovery in the global economy and condition of stock markets, for example inflation, but massive support offered by central banks and governments seems to ease concerns. Repo transactions of Fed hit another record level yesterday, signalling that there is ample liquidity in the system to prevent shocks. VOLX may be therefore set to resume drop. In such a scenario, the zone at $16.90 is the first support to watch.
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