Goldman Sachs Panic Index Records Largest Two-Day Swing in History

Goldman Sachs' Vol Panic Index recorded its largest two-day swing on record last week as US equity markets shifted abruptly from post-election optimism to widespread selling.
The indicator surged to 9.57 out of 10 on November 5, crossing the 9.5 threshold associated with extreme market stress. Its roughly five-point daily increase was the third-largest on record, following one of the index's sharpest declines the previous session, according to Bloomberg.
The reversal coincided with heavy demand for downside protection after investors reduced hedges during the preceding market rally. The rapid change in positioning contributed to unusually volatile trading conditions.
Goldman Sachs traders noted that similarly elevated readings have historically appeared near medium-term market turning points. However, extreme panic does not establish that a bottom has formed, particularly while leveraged investors continue reducing exposure.