VIX Posts Worst Weekly Loss on Record

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The CBOE Volatility Index plunged 39 percent this week, marking its worst percent drop in at least 26 years.

Similarly, the iPath S&P 500 VIX Short Term Futures ETN (VXX), designed to track VIX futures, touched an all-time low of 27.5 during Friday's trading session.

The VIX, a measure of market risk and often referred to as the "investor fear gauge," fell below 14, its lowest level in three months, as the S&P 500 rose to its highest settle in 5 years.

(Read more: S&P Closes at Best Level Since Dec. 2007)

Despite the bullish sentiment, forward futures contracts for the VIX point to more volatile times ahead. In fact, three of the last four times the VIX fell over 25 percent in a week, the market posted a loss the following week.