VIX fell again on Friday as calm continued to return to major U.S. markets.

Stocks continue to shrug off the recent swoon but still remain vastly overvalued compared to most historical measures.

Some analysts say that this is the third most overvalued market in history, just behind 1929 and 2000, while others say that some measures put it at the most overvalued of all time.

Markets typically recede from such lofty levels, sometimes dramatically and so long term returns could be substantially lower than investors have grown used to since the advent of free money and zero interest rates since the 2008 crisis.

The recent action in VIX ETNs has been impressive, to say the least, with XIV, the wildly popular inverse VIX ETF imploding after hours and losing more than 90% of its value in one day.

The decline was so outrageous that the Securities and Exchange Commission and Commodity Futures Trading Commission are reviewing the situation.

February 5th was D-Day for volatility based products when the Dow had its biggest single point drop in history and VIX skyrocketed. XIV was worth almost $2 billion before the crash and the after-hours decline made it impossible for investors to get out. SVXY, the ProShares inverse VIX product also took nearly a 90% dive but managed to stay open for business.

The last word: VIX continues to drop as volatility exits and calm returns to U.S. markets. For the time being, VIX Trader remains positioned in VXX credit spreads and will continue to trade VXX options and VIX ETNs as opportunities develop.

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