Despite a decline in the VIX, the persistent stickiness of the 'vol of vol' as indicated by the VVIX Index suggests that traders remain concerned about potential tail-risk events. This ongoing demand for volatility hedges reflects a market still wary of sudden spikes in realized volatility. The S&P 500's current resistance around the 6,100 mark, driven by significant option positioning, further underscores 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. As of 15:30 on January 23, the VIX stands at 14.83, down from its last close of 15.10, reflecting a continued but cautious optimism in the market.