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Warsh Pick Jolts Volatility: VIX, VVIX, VXX, UVXY (Jan 31, 2026)

Market brief: Friday’s selloff across U.S. equities nudged the volatility complex higher, with VIX up modestly and VVIX jumping more sharply, aly the kind of tape where investors do not panic, but they do pay up for optionality.

Looking Back: What moved volatility products

Equities finished red, keeping hedges in demand into the weekend. The Dow fell 0.36% to 48,892.47, the S&P 500 slipped 0.43% to 6,939.03, the Nasdaq dropped 0.94% to 23,461.82, and the Russell 2000 sank 1.55% to 2,613.74. A broad, month-end flavored fade tends to matter more for volatility than any single headline because it changes positioning and forces portfolio managers to price the cost of protection again.
VIX closed at 17.44 on Jan. 30, up from 16.88 on Jan. 29, a gain of about 3.3%. This is the market’s way of saying “uneasy” rather than “unhinged,” especially after a January that still left investors sitting on meaningful gains.
VVIX outpaced VIX, a tell that traders were buying convexity in VIX options. VVIX, which reflects implied volatility of VIX options, closed at 108.18 on Jan. 30, up 6.31% on the day. When VVIX climbs faster than VIX, it often reads as a scramble for protection in the protection market, particularly for near-term event risk.
Policy uncertainty re-entered the chat: the Fed chair story mattered. Markets weighed President Trump’s reported pick of Kevin Warsh for Fed chair, with commentary pointing to a more hawkish tilt and a rates path that could be less friendly to richly valued growth stocks. Yields firmed, equities softened, and volatility got repriced upward.
Geopolitical risk kept a small premium in the volatility stack. Separate reporting flagged elevated uncertainty tied to U.S. strikes on Iran and the market’s focus on any response, alongside big swings in crude oil implied volatility earlier in the period. Even when equities do not crater, this kind of headline risk can lift short-dated volatility via demand for insurance.
VXX and UVXY: no major fund headline, mostly a translation of VIX futures moves. Search results did not surface structural news such as splits, index methodology shifts, or filings that would independently explain price action. UVXY was cited around $37.23 on Jan. 30, up about 1.55%, with heavy linkage to front-month VIX futures exposure (including February 2026 futures concentration). A prior technical note highlighted UVXY moving above its upper Bollinger Band on Jan. 20, a signal some technicians treat as mean-reversion prone.

Sources (Looking Back)

Looking Forward: What could move VIX, VVIX, VXX, UVXY next

Macro data that can reprice the whole curve. Early February brings the kind of releases that make volatility traders look less at “earnings beats” and more at “rates math.” ISM Manufacturing (Feb. 2) and ISM Services (Feb. 4) can quickly reset growth expectations and the inflation narrative that sits underneath equities.
Jobs report, then CPI: two checkpoints for the Fed path. The Employment Situation report (Feb. 6) and CPI (Feb. 11) are classic catalysts for jumps in short-dated implied volatility. Strong prints can lift yields and pressure long-duration tech, while weak prints can revive recession talk. Either direction tends to raise the price of insurance first and settle the debate later.
Fed messaging risk stays live after the chair narrative. Scheduled Fed remarks in early February offer a chance for officials to lean against, or validate, the market’s read on policy. Even small tonal shifts can move VVIX because VIX options are a preferred instrument for expressing event-driven views.
FOMC minutes can reopen the last meeting’s arguments. The release of FOMC minutes (Feb. 18) often acts as a second press conference for markets. If the minutes emphasize inflation vigilance, the volatility bid can extend; if they emphasize downside risks, it can reshape the skew in SPX and VIX options.
Earnings season aftershocks, especially in AI-heavy megacaps. Late-January results already showed a familiar dynamic: solid numbers, tough questions about the payoff from heavy AI spending. Volatility tends to rise when guidance and capex narratives diverge across the same handful of companies that dominate index weightings.
Geopolitics remains the wild card that VIX cannot schedule. Any escalation in Middle East tensions, or a renewed energy-price shock, can lift front-end implied volatility even if realized moves in equities stay contained. That asymmetry often shows up first in VVIX.
VXX and UVXY: watch the futures curve, not the headlines. With no notable fund-specific news flagged, the next meaningful driver is likely the shape of the VIX futures curve and the market’s appetite for near-term hedges. In contango, these products can face persistent roll pressure; during stress, backwardation can briefly turn them into clean, fast proxies for a spike in fear.

Sources (Looking Forward)

Quick take: the volatility story in one paragraph

Friday’s pullback put a mild bid under volatility, with VIX pushing up into the 17s while VVIX climbed harder, a sign that investors were paying up for VIX options as event risk clustered around the Fed narrative, heavy tech positioning, and geopolitics. For VXX and UVXY, the signal remains straightforward: absent fund-specific news, they are likely to keep tracking the front end of VIX futures, which can reprice quickly as the calendar turns to ISM, payrolls, and CPI.

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Tony

I have been trading options since 2010 and have been testing and experimenting with various trading styles. Fundamental Analysis based, Technical Analysis based, Trend Following, Day Trading, Swing Trading, etc.

My primary option trading strategies incorporate volatility and I am constantly experimenting with various trading strategies to improve my PNL.

I hold two Master’s degrees (MSc and MBA) with career experience as a cancer research scientist and a digital marketer.

Warsh Pick Jolts Volatility | 2026-01-31