Despite a slight uptick in the VIX, the market is not exhibiting significant signs of distress, with implied volatility remaining subdued. The tech sector's resilience, bolstered by strong earnings reports from companies like ASML, has helped maintain investor confidence. The cost of downside protection remains near yearly lows, indicating a reduced expectation of near-term volatility. This environment of constrained market movements is reflected in the marginal increase in the cost of out-of-the-money puts on the XLK ETF, suggesting that investors are not anticipating a major downturn.
The ProShares Trust Ultra VIX Short Term Futures ETF (UVXY) experienced a modest increase, rising 0.7% to $18.74 as of 9:00 AM on Wednesday, January 29.