After the record setting day yesterday it is likely that we had a pullback today. There was no real economic news to make stocks selloff just a lack of good news. The only problem with yesterday’s rally was that it was too steep. VIX really could not move down because traders could not keep ATM vol that low so the VIX drop was small on Wednesday.
Today the S&P 500 had a huge rally on the heals of a pro growth speech from President Trump. But take a look at how well vol held up today:
Looking at the way VIX held up we are lined up for one of two scenarios: