The market's jitters appear to be melting away.
This is unusual, because the VIX (which is calculated from the prices of options on the S&P 500, which are more commonly used to hedge downside losses rather than speculate on upside gains) and the S&P 500 tend to have an inverse relationship. As the market rises, the boost in confidence leads the VIX to fall; conversely, adverse events or broad concerns lead stocks to fall, and the price of insurance to rise.
Yet thus far in 2015, the trend has not been in place. The S&P 500 is down 0.3 percent through Monday's open (so stocks are essentially unchanged) while the VIX has fallen 15 percent. This is especially odd because the market's actual volatility has been high, with huge up-and-down moves becoming increasingly common.
"Realized volatility has been super-elevated ever since the beginning of December," but the VIX is indicating that "we are due for a little bit of a lull here for a couple days," said Mark Sebastian, the founder of Chicago-based Options Pit, a consulting firm specializing in risk analysis.