The market's cautious optimism is reflected in the decline of the VIX, which has dropped to 14.86. Despite this, the persistent stickiness of the VVIX Index indicates that traders remain vigilant about potential tail-risk events. This ongoing demand for volatility hedges suggests a market still wary of sudden spikes in realized volatility. The S&P 500's resistance around the 6,100 mark, driven by significant option positioning, highlights the mechanical nature of recent market movements, with risk parity and CTA funds playing a pivotal role. The lack of bullish catalysts, coupled with headline risks from the new Trump administration, adds to the uncertainty, likely keeping equities within a tactical range as the market approaches the heart of the fourth-quarter earnings season and the upcoming January FOMC results.
The VS TR -1x Short VIX Futures ETF (SVIX) saw a slight increase, rising 0.71% to $26.85 as of 15:40 on Thursday, January 23.