Yo Pit Crazies, 

The nine-day VIX hit a 2026 high yesterday, spiking nearly two points above the regular VIX at the lows. Then it pulled all the way back to near even by the close. If you don’t know what that means, you’re missing the single best short-term fear gauge in the market. And yesterday it told you something important: this selloff is manufactured outrage, not structural damage.

Let me walk you through this.

What VIX Nine-Day Actually Tells You

The Cboe calculates five volatility indexes on the S&P 500 (SPX), ranging from nine days out to one year. Think of them like a stack of thermometers. The nine-day VIX reads the market’s temperature right now. The regular 30-day VIX reads where traders expect it over the next month. Normally, the longer-dated number is higher because more time means more uncertainty. That’s how it should work.

When VIX nine-day jumps above the regular VIX, that stack flips upside down. Traders are saying the next nine days scare them more than the next 30. That’s a panic signal. It means options buyers are scrambling for immediate protection, driving up short-term volatility prices past the longer-term ones.

Here’s where it gets useful. If VIX nine-day spikes above VIX and then snaps back quickly, that’s a tantrum, not a trend. If it stays above VIX and starts climbing past the three-month and six-month measures, you’ve got real trouble. Remember February 5, 2018? VIX nine-day crossed above VIX on January 29, and six days later we had the Volpocalypse, a single-day 115 percent VIX spike that wiped out the XIV and cost traders billions. The entire cash VIX term structure inverted perfectly. That was the real deal.

Yesterday’s spike? Not even close. VIX nine-day popped above VIX, made a 2026 high, and pulled back to near unchanged by the close while everyone waited for Alphabet (GOOGL) earnings. The 30-day VIX rose 3.6 percent to 18.64. Elevated, sure. But the term structure didn’t fully invert. The tantrum faded in hours.

The AI Panic That Doesn’t Add Up

What triggered the spike? AI fear. The Nasdaq fell 1.4 percent on Tuesday. Software stocks got hammered after Palantir (PLTR) CEO Alex Karp argued that AI is now so good at writing enterprise software that many SaaS companies risk becoming irrelevant. That wiped about 300 billion dollars in market cap from names like Microsoft (MSFT), Salesforce (CRM), and ServiceNow (NOW).

Bank of America called this selloff “internally inconsistent” in a note Tuesday, and they’re right. The market is simultaneously pricing in two things that can’t both be true: that AI spending won’t generate returns, and that AI adoption will be so powerful it destroys entire business models. If AI can’t deliver ROI, it can’t also be an existential threat to SaaS. Pick one.

Meanwhile, the real earnings news was solid. Advanced Micro Devices (AMD) beat estimates with $1.53 earnings per share and $10.27 billion in revenue. The stock still dropped 17 percent on a cautious outlook. Alphabet beat on earnings and revenue too, posting a 30 percent jump in fourth-quarter profits. The stock fell anyway because the company announced 175 billion to 185 billion dollars in AI capital expenditure for 2026. Traders sold the spending, not the results.

Your Move This Week

I expect VIX nine-day to close at the lows of the week on Friday. Most of the real news, earnings, economic data, has been good. This vol spike was AI-manufactured outrage, not a signal that something is structurally broken.

Here’s your takeaway. Start watching the VIX nine-day to VIX ratio. When it pops above one and reverses fast, you’re looking at a buying opportunity, not a reason to panic. When it stays above one and the whole term structure starts flipping, that’s when you get defensive. The ratio below 0.75 means things might be getting too calm. Above 1.25, you’ve got real fear in the market.

Yesterday gave us a clean read. Panic in, panic out, signal resolved. The nine-day VIX did its job. Use it.

Hans and I go live Thursday, and he’s going to reveal his big idea for AI 2.0. He killed it for AI 1.0 in 2025. Hint: you can drop it on your foot. Be there.

To Your Trading Success,

AG

RANT & RAVE: AI Hasn’t Invented Anything New

Right now, the stock market thinks AI will take all the jobs and kill software as a service. Which leaves me with one question: if AI replaces everything, why do we need AI?

My favorite quote is, “Everything that can be invented has been invented.” That gem gets attributed to the head of the U.S. Patent Office in 1899. He probably never actually said it, which makes it even better. People have been terrified of new technology for over a century, and most of the time the fear is more invented than the technology.

Let’s go back to 1997 when ordering a book on Amazon was a thrill, everyone had jobs, and the budget deficit was heading toward zero. The good old days. AI will make life easier eventually. But tech bros forget how much the rest of us hate technology unless it actually helps. The last time this kind of panic hit the tape, it was DeepSeek in January 2025. That selloff was “overblown” according to Bank of America. I’d bet this one is too.