Yo Pit Crazies,
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AG's alter-ego Vol Man here with my weekly analysis. As usual, I start with my last forecast.
Last Week’s Big call for Feb 27
If stocks aren't selling off, they're going higher. Right now that's the case. Congress could take some responsibility and see where our money and votes are going, but it appears they don't want to do that either. For stocks to go higher, we need some more positive sentiment and a reason to rally. With no Gulf War III, this is still a dip-buying market and I expect VIX to have a tight range. We could break 18 next week on no news.
The Weekly Wrapup
VIX broke 18 and every dip was a buying opportunity. Sometimes I scare myself with predictions. I did close SPY put spreads when I could and will likely close all of my VIX call spreads this week. I will outline the reasons below.
The big news item this week was AI crushing all jobs by a timely missive put out by Citrini. Now by the time the week was almost over Block Inc (XYZ) was going to lay off nearly half of its staff. The story is true!!!!! Both stories sent stocks swooning and VIX mooning. Only to have both of them discredited, Citrini had a hedge fund write the missive and Jack Dorsey hired too many people and needed to fire them. Heck he spent $62 million on a company party. AI was not the bad guy after all but Anthropic might be after the Trump Adm put the kybosh on using Claude for the DoW. AI had a bruising week.
SPDR S&P 500 ETF (SPY) held up well considering Nvidia Corp (NVDA) killed earnings but could not rally. It would seem Nvidia is a great company but the stock value got too far ahead of itself. Much like Microsoft Inc (MSFT) after 2000, it will be hard for NVDA to become worth $8 Trillion from the current $5 Trillion. Remember MSFT did come around after 2018, just took 18 years. The Mag 7 holding up the market is essentially dead at this point but Mag7 0 DTE is still moving. But there are other stocks.
Dell Computer (DELL) was a nice standout as NVDA needed a place to put their chips. This stock is taking over my portfolio in one of my accounts and I think it is still a good value but I would add below $110.
Mini Rant
The SOTU was ok and nothing crazy so the market liked it. 80% of the public wants ID to vote for President but our wastrels in the Senate cannot get it done. I think 90% of our problems are caused by regulation and US Government fraud and fair elections will help. If the Senate cannot get it done, Republican voters stay home and then we get a rehash of the last Congress. Oy!
(Every Friday, The Options Insider Radio Network’s Vol Views offers bonus volatility insights with either Mark or myself, no charge!)
SPY daily price action over the last 30 days with one-day candles. SPY Sigma (volatility per term) for Mar, Apr, May
SPY got a decent range this week, but considering how high VIX was, SPY could not make lower lows. To me that means the story is pettering out. Whatever got folks in a selling mood is working its way out slowly.
Sigma volatility closed just lower this weeka touch higher, but not much.
SPX Realized Volatility snap on Feb 27, 2026
Here's what realized volatility means: It measures how much a stock actually moved over a specific time period. Think of it like checking your car's odometer after a road trip. The odometer tells you how far you actually traveled, not how far you planned to go. High realized volatility means big price swings. When SPY has high realized volatility, the market is unstable and prone to sharp drops.
SPY realized volatility dropped a bit to under 13. This fits with my narrative of higher lows for SPY. It is choppy but less so.
VIX Volatility Curves
Closing VIX curve, Feb 27, 2025
Closing VIX cash and curve, Feb 20, 2026
The VIX curve sits in a light contango and drifted lower by the close Friday. The Mar Contract is still above 20 with realized volatility below 13. That means stocks are moving crazy intraday but cannot pick a direction. I think this is week 4 of orbiting the market but I am starting to lose track.
Here's what that means: Contango is like water running downhill. VIX futures naturally want to flow toward the lower cash price over time. When the curve is in contango, traders expect calmer markets ahead and options volatility decays in your favor.
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OP VIX Zone Watch
VIX ZONE 1 9-13
VIX ZONE 2 13.01-17.99
VIX ZONE 3 18-23.99 ← We lived here
VIX ZONE 4 24+
VIX started the week with a drop only to pop on the Citrini news and an extra jiggle on the hot inflation. Zone 3 and stocks still cannot get more than 2% away from all time highs. It ain’t right for folks holding longer term VIX call spread and SPY put spreads like me.
VIX 30-day chart with one-minute candles
VIX is breaking the higher lows but more important not making new highs. This means the story is running out of steam that started rolling down a hill 1 month ago. VIX did close a t a higher low but that is on the Persian Gulf worries.
The Big Call
NVDA was the last earnings story so the upside velocity will crawl to a halt. 700 is the hard top with no positive news. 695 would be a surprise for SPY. Unless we invade Iran, 20 will be the high for VIX this coming week as the AI story starts to cool and maybe folks think higher productivity tools might be bullish stocks again.
To Your Trading Success,
Andrew