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Today felt like a classic volatility-dispersion session for the stock market, with a handful of mega-cap tech names driving the S&P 500 higher while the rest of the index struggled to gain any real traction. The equal-weight RSP ETF finished up just 24 bps, versus 50 bps for the SPX.
The spread between S&P 500 constituent volatility (VIXEQ) and the S&P 500 VIX index has widened to 23.1, putting it back near the upper end of its historical range. This measure typically peaks heading into earnings season.
The last time we saw levels like this was at the end of October, which was followed by the market decline in November. Before that, similarly elevated readings occurred in January 2025 and July 2024, both of which were also followed by sharp pullbacks in the S&P 500. Taken together, this pattern suggests a strong signal that another pullback could be developing once earnings season is behind us.
We have also seen weakness return in several private-equity names—such as Apollo, Blackstone, Ares, and Blue Owl—over the past few trading sessions, reversing much of the sharp gains they posted following the November sell-off. These stocks are worth watching because, in many ways, they may be reflecting the liquidity flows currently moving through the market. In addition, recent headlines around the group have turned somewhat more negative. Notably, these same stocks also led the decline we saw in October and November.
The SLV ETF implied volatility index (VXSLV) surged above 100 today, briefly peaking near 120 intraday—an extremely elevated level that could be consistent with a peak in silver prices. The last time we saw readings this high was during the COVID lows for silver in March 2020. This may be signalling a developing inflection point not just for silver, but for the broader metals complex, particularly given the sharp reversals seen today in platinum and palladium, alongside silver.
-Mike
Glossary by ChatGPT
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Basis Points (bps) – A unit of measure equal to one hundredth of a percentage point, commonly used to describe small changes in prices or yields.
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Earnings Season – The recurring period when publicly traded companies report quarterly financial results.
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Equal-Weight ETF – An exchange-traded fund that allocates the same weight to each constituent rather than weighting by market capitalization.
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Implied Volatility – The market’s expectation of future price volatility derived from option prices.
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Liquidity Flows – The movement of capital across assets or markets that influences price behavior and volatility.
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Metals Complex – A group of related metals markets, often including precious and industrial metals, that tend to move based on shared macro factors.
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Pullback – A short-term decline in asset prices following a prior advance.
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Volatility Dispersion – A condition where individual stock volatility diverges significantly from overall index volatility, often reflecting uneven market participation.
Disclosure
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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