Above and below are 10 minute Qs charts with QQV and VIX overlays.
Is anyone a bit surprised to see the correlation?
And, just to confirm a longer range correlation of the QQV and VIX, the lower 2 Qs charts are based on daily bars. There's really only a single divergence in these 2 charts as reflected in December, when Qs volatility rose, but VIX declined. What happened there?
So, despite the complex formula of SPX put and call reconciliation involved in calculating the VIX, is it, in fact, just a reflection of Qs volatility? It certainly has an uncanny relationship to the QQV and that must be considered a major factor when evaluating the utility of the VIX as a trading tool for the Qs.
Of course, the VIX is a measure of the volatility of the SPX not the NAZ. For that we have the $VXN, which looks a little bit different and I'll be probing some of those implications later this week.