Two things that always move together just came apart

Nasdaq volatility and S&P volatility move together. That is the rule.

When the market gets nervous, both rise. When it calms down, both fall. They have tracked each other for decades, because the same fear that hits the broad market hits big tech right alongside it. 

Right now that relationship has broken in a way I have not seen in my career.

The gap between the two just hit its widest point in 23 years. Options traders are pricing in 68% more turbulence for the Nasdaq than for the S&P over the next month. 

Nasdaq fear is reading near 31 while the broad market sits down around 18, calm as can be. 

The last time the spread stretched this far, we were heading into the pre-2008 crisis.

A gap like that will not stand. 

It either grinds back to normal, or it blows up. And when it blows up, you get an explosive amount of volatility. It cannot stay where it is. There is just no question in my mind on that part.

Tomorrow at 9:15 am ET, I am running a free live training to show you exactly what is driving this, and how I am positioning for the fireworks I think are coming.

👉 Sign up for tomorrow's free live session

To your success,
Don Kaufman