Most investors register “volatility” immediately as the sudden forcefulness of price action. Most educated investors will associate it with the VIX (VIX), the “CBOE Volatility Index” that tracks the velocity of S&P 500 options. But the VIX only tells us what volatility is now. I’m more interested in what’s coming next. I’m tracking a handful of metrics that give some advance warning on future volatility, and they’re flashing red for the S&P 500 (and perhaps not in a bad way). Let’s walk through them so we’re prepared for what’s about to hit the market and maybe spike the VIX.
Volatility Is on the Rise — And It’s Not Slowing Down
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Rising volatility has moved from being background noise to a significant concern. Options flows and dealer positioning are converging to amplify market movements rather than mitigate them. This can cause momentum to build more aggressively, meaning the next shift may happen more quickly and with greater impact than many anticipate.