Goldman Panic Index Hits Historic Peak, Signals Potential Rally

Goldman Sachs' Vol Panic Index achieved its largest-ever two-day movement last week, surpassing a record set in April 2013. The indicator dropped sharply during the midterm relief rally before surging to 9.57 out of 10 a day later.

That level placed US stocks within Goldman's panic territory, a threshold reached only 15 times in the past. Historically, such extremes have been followed by S&P 500 gains, though the firm's traders caution that forced selling could persist.

Goldman Sachs Panic Index Shifted Dramatically in Two Days

Goldman's trading desk operates the gauge, which measures stress in US equities on a scale from zero to 10. The index relies on options-market indicators such as implied volatility and the expense of downside hedges.

According to Barchart figures, the combined two-day shift amounted to roughly 8.5 points. The prior record of 7.87 points was set on April 16, 2013.

Goldman Sachs Panic Index had its largest 2-day spike IN HISTORY last week 👀 👻 pic.twitter.com/dFdpSwzpkL

— Barchart (@Barchart) November 10, 2026

The turnaround started on Wednesday, November 4. Equities advanced after Democrats secured both congressional chambers, and the Dow posted a 3% gain following the election.

Customers used that upturn to unload their hedges. Consequently, the Panic Index recorded its fourth-biggest single-day decline on record.

That protection vanished just ahead of a market downturn. On Thursday, a selloff in AI chip stocks pushed the S&P 500 down 4.36%, marking its worst session since April 2025.

The index advanced roughly five points that day, its third-largest daily increase. Goldman trader Lee Coppersmith highlighted 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 downside protection also set a new benchmark. On Thursday, the Cboe processed 11.23 million put contracts, exceeding the 10.22 million traded on April 4, 2025.

Does a Record Panic Reading Point to a Rebound?

Goldman's own historical data suggests a more optimistic outlook. Following the 15 earlier readings above 9.5, the S&P 500 posted an average return of 4.6% over the subsequent three months.

Equities gained ground in 80% of those instances. Over six months, the average advance reached 9%, with a success rate of 73%.

Still, Coppersmith attributed the selloff to unfavorable positioning and forced re-hedging rather than solely to deteriorating 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 materialize.

Why a Second Gauge Shows Fear, Not Panic

CNN's Fear & Greed Index stood at 33 on Tuesday, November 10, within its Fear classification.

A week earlier, the measure was at 23, in Extreme Fear territory. It dropped to 20 after Thursday's plunge, as the VIX surged 70%.

Buyers have since reentered the market. The S&P 500 climbed 2.35% on Monday, its strongest performance since April 8.

Two records in a single week—in hedging activity and panic swings—illustrate how congested short-term positioning has become. Whether the recovery holds may hinge less on the election outcome and more on AI spending, which triggered Thursday's declines.