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The S&P 500 fell 0.4% Tuesday, but the VIX also fell 2.4%, extending Monday’s 22% drop. “Spot down, vol down” at that size is rare: just 4% of comparable S&P 500 down days since 1990, and the first since March 2025. ▪ It usually comes as fear drains after a spike: 69 of the 100 cases came with the VIX already at 19+. ▪ Seven came within three sessions of a 30%+ VIX jump, like this one, including China’s devaluation (2015), Brexit (2016) and Volmageddon (2018). ▪ The S&P 500 was higher a month later all seven times (avg. +4.2%) and three months later in six of seven (avg. +4.4%), vs. +0.8% and +2.4% for all days. ▪ The exception was 1990, ahead of Iraq’s invasion of Kuwait. Note: The VVIX also fell, but adding that to the analysis doesn't change things. Caveat: Small sample size.

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Citi’s earnings revision index was +0.02 in the week of October 30th, down from +0.06 the prior week (there was no reading the week before that), as its 20-week average continued to roll over, to about 0.16 from 0.18 two weeks earlier and 0.28 in mid-September. As I noted on October 25th, three of the four prior rollovers of about 0.8, 0.16 and 0.1 points in the 20-week average since 2021 (Jul ’21, Jun ’24, Sep ’25) were followed by declines of 25%, 8.5% and 9.1% (in 2023 the SPX declined first). At the time the index was down 2.5% from its October 6th record, and I said it was still too early to tell how much further (if any) the softening had to go. As of Friday, the SPX had fallen 5.7%.

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As I mentioned in last Thursday's evening update, we saw the first 80% NYSE downside volume day since December 2025, ending the longest streak without one in at least 30 years, per BTIG’s Jonathan Krinsky via @dailychartbook's nightly email. In the 15 previous “first in 3+ months” cases since 1996 according to Krinsky's analysis: ▪ 11 saw at least one more 80% downside days within 30 sessions, and five saw five or more. ▪ The S&P 500 was lower on average one and two weeks later, and up just 0.3% a month later (higher 53% of the time). ▪ When five or more followed, it was higher 50 sessions later just once (avg. -6.9%). ▪ When fewer followed, it was higher 30 sessions later in 9 of 10 cases (avg. +3.5%). The 30-session window runs through December 18.

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The Day Ahead — A Light Calendar for Veterans Day In US economic data, with the bond market and government offices closed in honor of Veterans Day, Wednesday brings us only weekly MBA mortgage applications. U.S. stock markets are open. There are no Fed speakers or Treasury auctions scheduled. Just one S&P 500 component reports, and its market cap is under $100B: After the close: Vylor (VYLR). Remember to make it a point to thank a veteran today! Ex-US highlights include China’s Singles’ Day shopping festival, Germany’s final October CPI, and ECB President Christine Lagarde on a panel at the Paris Peace Forum, with ECB policymakers Joachim Nagel, Martins Kazaks and Gabriel Makhlouf also speaking.

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The Equity Bounce Runs Into a Hawkish Fed Core CPI rose 0.3% for a third straight month and two current FOMC voters hinted at faster hikes, sending the 2-year yield up the most since April 2025, but the S&P 500 recovered much of its intraday losses despite Nvidia sliding again. https://t.co/c0vEuwFbTt