VIX was down some last week and the newly christened front month March future followed the index lower and then some. Despite the drop, the March future finished Friday at a pretty steep premium relative to the index which shows that despite the S&P 500 making new highs, the volatility market isn’t convinced 2015 will be a repeat of the past couple of years in the equity space.

VIX Curve

I pulled out a couple of charts from my 2014 year end volatility review and updated them with 2015 data through Friday. A couple of things of note. First, the low for 2015 is slightly higher than the average for 2014.   We had two new record high closes in the S&P 500 last week and VIX is higher than average in a year where 1 out of 5 days experienced a record S&P 500 close.

VIX High Low Close

That takes me to the other updated chart. This one was a favorite of mine toward the end of 2014 and with the three record setting days in 2015 it looks even more dramatic. From the beginning of 2014 the S&P 500 has closed at a record high 56 times. I highlight the VIX closing prices on each of those days on the chart below along with the average close for VIX on those days.

VIX on Records

My job in this space is to say what’s going on in the volatility space, all I can say is just about everywhere I look it appears the volatility markets are not buying into the S&P 500 moving higher as it did over the last couple of years. Time will tell whether they are right or wrong.