Why A 3–4% Pullback Could Turn Violent
Calm on the Surface
Equities are making fresh highs, but the vol complex is starting to send a less comfortable message. Vol rose with spot, downside protection has been crushed to unusually cheap levels, and several mechanical selling flows begin to cluster if the market moves lower. None of this says a reversal is imminent. Upside positioning could still fuel another squeeze, but the asymmetry is getting interesting.