The Market Isn’t Panicking… It’s Just Not Playing

Yo Pit Crazies,

AG’s alter-ego Vol Man here with my weekly analysis. As usual, I start with my last forecast.

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Last Week’s Big call for Mar 13

Mostly we range between 650 and 690 with little surprise if SPY touches either.

SPY moved but nowhere near the range that I thought it would. Stocks did jump around but way less than what traders were looking for. We began the week with a big pop in oil and stocks never recovered mostly because the Iran conflict is not over.

The Weekly Wrap Up

The story is in the chart below. This is the US Oil Trust (Ticker: USO) and it started the week at 3 year highs and it sold off only to get bought up again. Crude oil prices and delivery are freaking people out. Even though there are no gas shortages, traders are getting ready. That instability is the whole market right now. Nothing else matters.

Mini Rant

There is no reliable news for what is going on. The Iran Revolutionary Guard force is degraded by 90% but no one would know it. In the middle of all of this, Congress is trying to pass a bill making housing less affordable. Of course it is called the Affordable Housing Act. Our elected government is disappointing at nearly every turn.

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SPY daily price action over the last 30 days with one-day candles. SPY Sigma (volatility per term) for Mar, Apr, May

SPY closed at a month low and traders just feel tired of buying waiting for this news. I believe this is more of a lack of participation than anything else. When the evidence points to lower prices ahead, the disciplined trader’s move is simply to wait.

Sigma volatility ended the week near 30-day highs. This is a sign that traders have made hedging against weekend uncertainty a standing habit.

SPX Realized Volatility snap on Mar 13 , 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 is still under 13 on the 10 day and VIX is 27. Crazy that no rally or selloff can continue to the next day with any vigor. 12 realized volatility with a 27 VIX means no one wants to play.

VIX Volatility Curves

Closing VIX cash and curve, Mar 07 and Mar 13

The VIX curve is in full backwardation. All the short term VIX futures are higher than the long term VIX futures. That means traders expect VIX to jump in the short term or at least keep the move going higher.

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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 touched here

VIX ZONE 4 24+ ← We lived here

VIX started the week in Zone 4 at 31 only to give it back as oil price plunged. VIX collapsed as oil prices collapsed and now they are on the upswing again. VIX and oil prices look about 100% correlated now.

VIX 30-day chart with one-minute candles

VIX made a high this week and spent the rest of the week trying to get back there. The trend should persist, with VIX continuing higher until there’s a meaningful catalyst for de-escalation out of the Middle East.

The Big Call

Remember when Hamas invaded Israel in Oct 2024? Oil prices spiked and everyone thought the worst. Now Hamas is toast, Hezbollah is on the run, and Iran is clinging to what is left of their missile launchers to bring down their enemies. My guess is they will eventually run out of them. I don’t think it will happen this week so my prediction is SPY will likely continue lower toward 650 while VIX coils tighter, building pressure until the market finally gets its catalyst.

To Your Trading Success,

Andrew