Where AI Software-mageddon Meets SPX Sideways Slop: $VIX 19 - Should You Trust It?

The $VIX continues to keep traders on edge, and the buying algos at bay:  

This is the first time since late Sept. '25 we've seen the $VIX get above the 50 day ma for more than 2 weeks, and stay there. Looks like we're on track for a weak close. 🎉

— Veteran Market Timer (@3Xtraders) February 19, 2026

Monday was another bloody session, with the selling spilling over into several sectors. Took 2-3 days to pinpoint the catalyst, and the story just gets interestiner, and interestinger—FOCUS:  

• Software-mageddon? 
• Trump tariff chaos? 
• Private Credit - yeah thanks Jamie Dimon for the Tuesday Morning Quarterback!    
• Monday's Plot Twist: A futuristic fable written by a couple of shady-looking macro-fund managers in a Manhattan high-rise. Citrini Research’s “2028 Global Intelligence Crisis” memo — framed as pure "scenario, not prediction" — hit X like a viral contagion Sunday night and suddenly everyone was piling on the AI doomsday machine psyop theater [Citriani's AI doom report scares investors]. 

• Who/What really led the global correction? The same canary in the coalmine I've been sounding the alarm on for months - Japan - mic drop     

• The 5 reasons behind Monday’s global stock market rout yahoo finance/ fortune 

Pretty much no trades are working including the hysterically hyped "Broadening Out" trade.    

Hammering a few more nails in the "broadening out" (economy) theory coffin: The Economy isn't in good shape. Cloud -5%, Airlines -3%, Generative AI $CHAT - 3.86%, $SPX Insurance sector -2%, Retail sector -2%. $TRAN too! 

— Veteran Market Timer (@3Xtraders) February 23, 2026 

BOOM: Who appears on my screen again this morning, but perma-clown Julian Emanuel trying to sell us on the idea that the $VIX is overbought, and that options traders are contrarians (which they certainly are), but one thing I've learned over the years it to NEVER ARGUE THE TAPE.   
Granted: The $VIX Isn't Too Convincing

$VIX hits 20 again - It's become a mid-morning ritual. The tech heavy $SPX plummets

— Veteran Market Timer (@3Xtraders) February 23, 2026

With NVIDIA Earnings After The Bell I wouldn't be hanging my hat on that peg, after the trend we've seen - tech stocks being taken down on one AI fear, or another, over the past few months. 

The market should be afraid, very afraid - it's not (and that's a red flag) 

 Buy the dip, sell the rip continues to provide some comic relief, and good gains for those who can stomach the volatility, but after 3 weeks of this sideways slop is getting to feel like Groundhog Day the movie  
Feels like any other bear trap: $VIX poking it's head just above 20, for just long enough to suck in a few  more retail bears, but something doesn't feel right, and nobody can deny that there is some panic in the software, and private credit markets, and that panic could still spill over into other sectors - yet I still give that a low probability.  
Caution advised 

P.S. I said no trade is working, but the buy the dip trade actually has been working really well. If you've been able to crack the code on it. Never give up! 

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