P2 Weekly Update — Bull Market Continues its record run
Date: Friday, May 8, 2026 SPY: $737.35 · SPX: ~7,391 · VIX: ~17 · /VX: ~19
TonyB Commentary
Well, the market certainly continued its relentless upward momentum this week.
The S&P 500 gained another +2.5% while the Nasdaq exploded higher by nearly +5%, both pushing into fresh all-time highs even after finishing April with massive gains of roughly +10%. It’s remarkable to see this type of continuation move immediately into the first week of May without any meaningful pause.
What’s even more impressive is the magnitude of the daily moves. The S&P has been making new highs while averaging intraday ranges of nearly +80 handles per day. Meanwhile, the Nasdaq has been delivering daily ranges exceeding +500 handles, fueled almost entirely by relentless strength in AI, semiconductors, and mega-cap technology names.
The Russell 2000 also joined the breakout party earlier in the week, making new highs on Wednesday before consolidating sideways into Thursday and Friday. The Dow Jones, up a more modest +1.5%, was actually the most complacent index of the week, still unable to decisively close above the psychological 50,000 level.
This rally continues to be driven by several powerful tailwinds coming together at once:
Persistent AI and semiconductor leadership
Stronger-than-expected earnings reports
Macro relief from falling oil prices
Continued compression in volatility
That last point is important.
Volatility has now fallen to its lowest levels since February, and I believe we are entering a very important area to monitor closely. /VX near the 19 level and VIX around 17 have historically acted as areas where volatility can stabilize and potentially bounce.
My concern is whether this environment starts resembling the summer of 2024, when volatility completely collapsed and stayed suppressed for months, with VIX trading near 13 and /VX hovering around 15 or lower. Markets can become very complacent in those environments, often creating conditions for sharp volatility spikes later.
One interesting development today was the action in VVIX — essentially “volatility of volatility.” Even while equities were making fresh highs, VVIX actually rose over 3%, which tells me that beneath the surface, the options market may still be pricing in the possibility of a sudden volatility expansion.
To me, volatility currently feels like a fragile calm.
The market appears extremely strong on the surface, but underneath, there remains sensitivity to any unexpected macro, geopolitical, or positioning shock. I would expect volatility to expand meaningfully if we begin breaking below some important technical levels:
/ES below 7,250
/NQ below 28,000
/RTY below 2,800
Until then, our approach remains disciplined and cautious.
We continue to gradually roll up existing short puts, maintain positive delta exposure, and keep contract sizing on the lower end relative to buying power. In markets moving this fast, risk management and flexibility remain just as important as participation.
— TonyB
