There was some unusual action in the VIX on Friday. As many traders are aware, it typically trades counter to the S&P 500. So on days the SPX finishes up the VIX will normally close down. I have shown several times in the past that there are often bearish implications when both the SPX and VIX rise on the same day. One quirk of the VIX is that it has a natural tendency to fall on Friday afternoons and then rise on Monday mornings. So while it is unusual to see both the SPX and VIX rise on the same day, it is especially unusual to see it happen on a Friday. I looked at this scenario last night.

In last night’s Subscriber Letter I broke down the results a little further by filtering on the long-term SPX trend. I found that while downtrending reactions were more exagerated, occurances during an uptrend were still quite reliable.