Dan Nathan's VIX Analysis

Dan Nathan analyzed the recent spike in VIX last week on CNBC's Options Action.

Nathan tried to show what has been happening in the past every time the VIX spiked.

Nathan's chart showed that in the last year, the VIX jumped more than 50 percent from the 52-week low on four occasions. He believes that this is very important because the Fed has been buying a lot of bonds in that period. Nathan said the Fed was buying $85 billion a month -- are now down to $25 billion -- and will be done soon.

He also explained a relation between VIX and the S&P 500. The VIX jumped on every correction in the S&P 500, but a few months later the market gained 10 percent. He believes that this situation is entirely different. Nathan said if traders want to follow the pattern and buy the S&P 500 on the VIX spike, they should wait for the confirmation that the uptrend is still strong.

Nathan thinks that the 1,860 level is an important support point that will tell more about the direction of the market. S&P 500 closed at 1,925 on Friday.