AJ Tiarsmith
5 min read
Quick Read
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After the VIX’s biggest jump since April 2025, SPY has historically gained a median 5% over six months, rising 79% of the time.
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Options traders stayed bearish on chips, with puts making up $1.5 billion of $1.7 billion in SMH premium.
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Buffett’s 1986 wording says to be greedy “only” when others are fearful, and he never tries to predict when fear arrives or leaves.
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On Thursday, Wall Street’s fear gauge had its sharpest one-day move in about a year and a half. The Cboe Volatility Index, or VIX, closed at 28.18 on Nov. 5. That was up 11.57 points from 16.61 on Wednesday. The VIX uses S&P 500 option prices to measure how much volatility traders expect over the next 30 days, which is why it’s called the fear gauge. CNBC, citing Bespoke Investment Group, reported that it was the VIX’s biggest one-day move since the April 2025 “Liberation” week for tariffs.
Stocks fell hard alongside it. The SPDR S&P 500 ETF (NYSEARCA:SPY) dropped 4.41% on Thursday. Hedgeye said the S&P 500 posted its largest single-day decline since April 3, 2025, and the NASDAQ 100 fell 6.5%.
Buffett’s Rule Has One Word Most People Skip
Warren Buffett’s best-known line on market psychology comes from his 1986 letter to shareholders: “Our goal is more modest: we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Most people quote a shorter version that drops the word “only.” That word makes the rule more conservative. In Buffett’s version, greed is the exception and needs widespread fear to justify it. The same section also limits how far the rule goes. On fear and greed, he wrote that “we never try to anticipate the arrival or departure of either disease.” He added that he had “no idea” whether the market would go “up, down, or sideways in the near- or intermediate term future.”
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What 19 Past Fear Spikes Show About the Next Six Months
CNBC’s Oliver Renick cited Bespoke research covering the 19 times since 1990 that the VIX rose at least five points from a starting level under 20. Three months after those spikes, the median S&P 500 return was 4.2%, and the index was higher 68% of the time. At 6 months, the median return was 4.8%, with gains 79% of the time.
