So I spent the evening and early part of this morning watching different networks while watching the financial markets at the same time.  The chart below is a 5-minute chart showing the S&P 500 and VIX futures trading during the non-US hours trading session.  Then after 3 hours of sleep I taught my class at Loyola, spending half of that talking my students down from their disappointment at the election results.   There were a couple of things that stand out on the chart from last night.  First the picture and then I’ll summarize below.

sp-vix-election-night

The first thing is not highlighted on the chart, but is very visible.  Every piece of news that came out seemed to favor Donald Trump and for a few hours every new piece of information resulted in a new high in VIX futures and new lows in the S&P 500 futures.  About 9:15 Chicago time I sent my 12-year old to bed.  She asked me who I thought was going to win, I told her we still didn’t know.  Being the bright child that she is, she then asked what VIX was doing.  When I responded to her by saying it was up over 30% she responded with, “Sounds like Trump is going to win”.

The second thing worth highlighting is a bit subtler.  Late in the evening S&P 500 futures were limit down.  The flat price action below the purple arrow above shows this.  VIX futures were still trading and did not make a new high when we hit the S&P limit.  When the S&P futures commenced trading again note that VIX futures were dropping as the S&P futures were climbing.  VIX is called ‘the fear’ index for a reason, and it did a pretty good job last night signaling when fear had peaked.