What Level is the "New" Normal For Distressed Volatility, 10 or 20?

For you volatility valuation analysts out there, what level is the new (or old) normal for distressed volatility, 10 or 20? We hit the 10s in 2007 before the market peak and now we are around 20. Is buy and hold back which will push volatility back to 10 or are we in a new era of heightened volatility. Below I provided a VIX spot chart, futures curve and a video from the most recent Sonar.

David Rosenberg thinks the VIX will be between 30 and 40 next year and if Prechter's right that a new wave is coming in 2010, perhaps he's right. The S&P still needs to break the uptrend. I'd like to hear what the VIX pros have to say. Good places I like to check.

http://www.vixandmore.blogspot.com/
http://dailyoptionsreport.com/
http://www.optionmonster.com/webcasts/volatility_sonar/player.jsp?nc=1261259736050

(Volatility Sonar courtesy of OptionMonster)


VIX futures are still at a premium to spot and near month. It's interesting that the curve is unchanged from the last time I posted on Nov 27. No volatility spikes are sticking. Brief spikes tipped the curve into slight backwardation but not for long. Quite interesting.  Here is the chart of VIX spot and the VIX futures curve from Friday (data from CBOE/cfe).

VIX Chart (Stockcharts.com)