Goldman Sachs’ Vol Panic Index posted its biggest two-day swing on record last week, beating an April 2013 high. The gauge collapsed during the midterm relief rally, then jumped to 9.57 out of 10 a day later.
That reading pushed US stocks into Goldman’s panic zone, a level crossed only 15 times before. Historically, such extremes preceded S&P 500 gains, but the bank’s traders warn that forced selling may not be over.
Why the Goldman Sachs Panic Index Flipped in 48 Hours
Goldman’s trading desk runs the gauge, which scores stress in US equities from zero to 10. It draws on options-market signals such as implied volatility and the cost of downside protection.
Barchart data puts the combined two-day move at roughly 8.5 points. The previous record, 7.87 points, dated back to April 16, 2013.
The swing began on Wednesday, November 4. Stocks rallied after Democrats won both chambers of Congress, and the Dow’s post-election jump reached 3%.
Clients used that rally to sell their hedges. As a result, the Panic Index logged its fourth-largest daily drop on record.
That protection disappeared just before investors needed it. On Thursday, an AI chip stock selloff dragged the S&P 500 down 4.36%, its worst session since April 2025.
The index climbed about five points that day, its third-largest daily gain. Goldman trader Lee Coppersmith captured the reversal.
“The combined two-day swing was the largest on record, which I think shows how quickly the market went from relief to outright panic.”
Lee Coppersmith, Goldman Sachs trader, via Bloomberg
Demand for protection set a record of its own. Cboe handled 11.23 million put contracts on Thursday, topping the 10.22 million traded on April 4, 2025.
Does a Record Panic Reading Point to a Rebound?
Goldman’s own history offers a more constructive read. After the 15 earlier readings above 9.5, the S&P 500 gained an average of 4.6% over the next three months.
Stocks rose in 80% of those cases. Over six months, the average gain reached 9%, with a 73% hit rate.
However, Coppersmith tied the selloff to poor positioning and forced re-hedging as much as to weaker fundamentals.
“Not necessarily a reason to rush back into risk, but it’s getting harder to ignore the potential opportunity on the other side.”
Lee Coppersmith, Goldman Sachs trader, via Bloomberg
If forced selling resumes, that historical pattern could take longer to play out.
Why a Second Gauge Shows Fear, Not Panic
CNN’s Fear & Greed Index read 33 on Tuesday, November 10, inside its Fear zone.
A week earlier, the gauge stood at 23, in Extreme Fear. It slid to 20 after Thursday’s crash, as the VIX jumped 70%.
Buyers have since returned. The S&P 500 rose 2.35% on Monday, its best day since April 8.
Two records in one week, in hedging volume and in panic swings, show how crowded short-term positioning has become. Whether the rebound holds may depend less on the election than on AI spending, which drove Thursday’s losses.
