Stock Talk - Volatility Speaks: Stock Market Update, Friday January 16, 2026

Episode Date: January 16, 2026

Do the Tradeable Volatility Markets think there are Road bumps coming? Turn on the financial news and you’ll hear the word “volatility” almost every day. But are markets really more volatile... or does it just feel that way? In this video, I break down what market volatility actually looks like as we head into 2026, a mid-term election year that has historically brought wider swings and heightened uncertainty. I walk through the data behind market drawdowns, explain what’s normal versus what’s truly out of the ordinary, and put recent market moves into proper long-term perspective. We start with bond volatility, using the MOVE Index as ground zero for stress in collateral markets. Despite the headlines, the data tells a very different, and much more constructive, story for Treasuries and liquidity conditions. From there, I pivot to stock market volatility, covering: Realized vs. implied volatility What current SpotVol levels are telling us Why short-dated options are pricing in more risk How the VIX and volatility futures curve signal potential market vulnerability later in Q1 and early Q2 Most importantly, I explain what all of this means for investors over the next 4–6 months and why periods of elevated volatility often create the best long-term opportunities for disciplined investors willing to stay patient. This is also why we’ve emphasized patience in recent weeks. The options market is hinting that a real “buy the dip” moment may emerge later in Q1, setting the stage for a potential mid-year rally.   📅 Join us live on January 29, 2026, as we unveil our full 2026 Market Outlook with Troy, Charles, and myself. Feel free to send in questions ahead of time if there are specific topics you’d like us to address. https://click2retire.com/Register-1h-2026-mos   About Chris Perras, CFA®, CLU®, ChFC®, Chief Investment Officer: As CIO, Chris is the lead investment strategist and director of research at Oak Harvest Financial Group. Chris develops the firm's core market outlook, putting his decades of experience and expertise to work for our clients. He hosts Oak Harvest's podcast, "Stock Talk," available on the website with new episodes each week. He completed his undergraduate studies at Georgia Tech, and went on to obtain an MBA from the Harvard Business School. Driven by a desire to maximize his knowledge and skill set, he acquired financial planning and investment management qualifications, becoming a Chartered Life Underwriter (CLU®), a Chartered Financial Consultant (ChFC®), and a Chartered Financial Analyst (CFA®).   Stock Talk is a weekly vlog/podcast dedicated to discussing the Oak Harvest Financial Group Investment Team's perspective on what's happening in the market. Hosted by Chief Investment Officer Chris Perras, each episode brings you our views on stocks, the market, and the economy with a little education thrown in for good measure. Listen each week and help stay connected to your money!   Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free visit: https://click2retire.com/lets-connect   Important disclosures: Content of Oak Harvest podcasts expresses the views of the speaker and is for informational purposes only. Oak Harvest believes that any data, articles, or information cited are reliable at the time of creation, but does not warrant any information contained herein to be correct, complete, accurate, or timely. References to third-party analysts should not be seen as an endorsement of their views or recommendations, and you should do your own research before investing. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast constitutes personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Any specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.

Okay, investors, turn on the financial news, and most days you'll hear somewhat talking about markets being highly volatile and uncertain, and more often than not, you'll also see the interview nod and agreement. With 2006 being the second year of a presidential cycle, the dreaded midterm election year, historically, while posting positive returns, these midterm years, like we are in this year, have elevated levels of volatility and exaggerated seasonal swings and returns. English language translation, the highs and lows, the ups and downs in the indexes throughout the year tend to be wider and have more frequent swings. Some years of the market in the returns it generates feel volatile, but aren't mathematically that far off a normal year. Over the last five years, an investor had to endure minus 27.5% peak to trough decline in the SP 500 in 2022 and another Trump tariff dump of minus 21% last year in April with over 10% of 10% of. of that coming in less than a week. That's out of the ordinary volatility. But investors know that the longer-term reward for investing in equities is the return. Risk is enduring the downside volatility at times. Here's the data from Charlie Vello on annual drawdowns and their frequency.

A minus 5% decline in the SPI-100 happens nearly every year. Well, minus 10% decline happens nearly every 18 months. So are the markets really more volatile than they have been? Or is the financial media guilty of making investors feel more volatility. Look at the data. Bear market decline of minus 20% happens a little over once every four years, while a recessionary decline of 30% or more happens one out of 10 years. With these stats in mind, it brings me to this week's topics. Market volatility, what you're feeling, what's happening, and what we're seeing over the next four to six months. Let's talk about different bond volatility first. I'd like to follow a measure of Treasury bond market volatility. This is an index we've discussed many times the last five years, the move index.

I consider this ground zero for the collateral markets that many institutions use to leverage and trade their portfolios on margin with debt to try to amplify their returns. I've discussed this index in the past during times of severe market stress and forced investor selling in both stock and bond markets by those margin clerks under the headline collateral damage. As U.S. Treasuries are supposed to be the safest, risk-free asset. that in the world by which every other public and private market financial product is measured. Here's the chart of the Move Index over the last 15 months. It's down and to the right, and a very bullish downtrend for loans and collateral markets.

That's pretty contrary to most of the talk I hear on financial news about how unhinged the treasury markets are. In bond volatility, pick up here for a few months, if the tariffs get overturned, or if Fed independence becomes the topic de jure post-forth lining reports coming over the next few weeks, yes. But if the new Fed chair launches QE4 in May or late second quarter, third quarter, I would expect this lower to the right trend to be continued in the bond market and its volatility. That would be bullish. So pivoting back to stock volatility, long time enlisters, our investment content know we've discussed

realized volatility, implied volatility, and forward volatility a number of times. Like many other indicators, market volatility waxes and wanes and cycles. Here's a list of a few stock volatility measures I like to follow in their levels on Friday, January 9th as of this writing. investors realize stock volatility is a measure of an asset, single stock, or index, actual historic price change over a period calculated from past price data, like intraday, daily, weekly, or monthly prices. The longer the time frame, more data that's used, more often than not, the less volatile and asset class appears. Short-term extreme high or low get averaged out and smoothed out, and the performance and return wave and the expected outcomes narrows. For this video, I'll use Bloomberg's Spotball Index as our realized volatility reference

parting. That's exactly what's happening in the market on a daily basis and price change at the S&P 500, not what's expected in the future by implied volatility that are used to calculate and trade options. Right now, Spotball is around 8.5. While not out of the ordinary, this is closer to its lower bound, which it can stay for a little while. But I like to compare this to all the implied volatility data points I can find. You know, the cost of hedging and buying puts to cushion the downside if the market drops suddenly.

You can start with one day and nine-day applied volatility numbers that I only just discovered about six months ago. Right now, the options market is making you pay about 50% more to ensure your portfolio over the next one to nine-day. Is this too much? Probably not. Why? Well, a lot of headlines have been swirling recently, both geopolitical, economic, and potentially legal, with the Supreme Court decisions imminent and anything you can come up out of left field that shocks the market for a few days or a few weeks. In fact, we've got two to three of them over the weekend as I wrote this. Geopolitical issues in Iran, potential credit card interest rate increase limit thrown in by the president and the biggie the DOJ investigation into the Fed chair for building costs.

Here's that chart on that nine-day volatility. Customers, also, given the low absolute level of all three indexes and datasets, I know that the granddaddy of them all, the VIX index, historic oil band, is around 12, X that record setting no volatility year in 2017. Short-term measures look until go lower. Recall that the VIX index, the CBO1, E volatility index measures the stock market's expectation of volatility over the next 30 days on a rolling basis.

It's not traded. It's math. It's a math equation that uses the S&P 500 option prices and is known by many as the Fear Index because it reflects investor sentiment and the cost to hedge or body insurance in your portfolio in the next 30 days. Viewers know I'm not a big fan of this index as it's not directly traded, but I do like to compare it to its trend and level. as well as history, and all those volatility products that are directly traded in markets,

of all futures. Here's that short. Nestors, I also like to look at the continuous contract curve of volatility futures. On Bloomberg, these are Ux 1, 2, 3, going out all the way 8 to 9 months. Those are January, February, March months, with them shifting to February, April in about a week. I found the most information and predictability in the UX2 and UX3 continuous contract. Right now, he's standing in the upper teens, although farther around April and beyond, are above 20 and very close to the historic average of about 21 and a half. Here's the table of all future prices.

This structure says to me, as it has real well, that very little is likely to happen over the next two to three weeks, but if so, the market would be jarred lower as opposed to higher. The market is likely to remain elevated as far as volatility with earnings reports hitting. However, this structure says to me that there is an open window in February through April that markets are vulnerable to dues or an event that would jolt volatility higher and the market's lower. The good news is, should that happen, markets participants are likely to buy the dip if and when forward volatility futures crossed 21 and a half, 22, and the front month of volatility curve rose and caught up with that. down 10 to 12% on the S&P 500. The insurance markets of the stock market, the option markets

are hitting that buyers would flood in and the low would come fast and furiously for a mid-year rally. This is one of the key reasons we labeled last week's video, Patients, after the Guns and Roses Rock Valley. The first half of 2006 is one of those years. The options markets are hitting at real, by-the-dip moment, come later in the first quarter lower. The good news is that our investment team has experience in these types of markets. Remember investors, that elevated volatility also means elevated opportunity for longer-term investors. Historically, investors' biggest incremental returns come from investing with volatility is high, not low, and markets are down, and others are either acting emotionally or worse yet being forced to sell when they really should be pushing

their chips into the center of the table and adding to investments. What does this all mean to you? or advice to you is keep following the investment content at Oak Carbis website and your YouTube channels. We'll be addressing our 2006 Market Outlook on January 29th in a YouTube live stream video with Troy, Charles, and myself. Send some questions in advance if you want any special investment topics to trust. Investors, whether you desire growth for income or a combination of both of your portfolio, the entire Oak Harvest team is here for our clients, doing what we can, a client for you, and your family's future. Regardless of what stage you're at in your for real estate you're at and your career or in your retirement.

All content contained with an Oak Harvest podcast expresses the views of the speaker and is for informational purposes only. It is based on information believed to be reliable when created, but any cited data, indicators, statistics, or other sources are not guaranteed. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you and nothing in this podcast should be considered as personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your

investment results may differ when compared to an index. Specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss and past performance is not indicative of future results.