Extreme Backwardation in VIX Futures | Tom McClellan

As of March 6, 2026, the VIX futures market is in extreme backwardation. The spot VIX has surpassed the highest futures contract by more than 10%, signaling acute near-term panic relative to expectations of future stability.

When the price of a near-month contract exceeds those of
further-dated contracts, the market is in backwardation.

WTI oil contract for April 2026 delivery is trading above $90, while the

contract 11 months out (March 2027) remains significantly lower at $66.50.

 

Blue annotations on the VIX chart above highlight similar negative spreads during key 2025–2026 events, such as tariff-induced sell-offs, employment revisions, geopolitical tensions, and the Bitcoin crash. These spikes often coincided with S&P 500 pullbacks that marked local bottoms before subsequent recoveries. While this pattern suggests current volatility may precede near-term stabilization, the broader market trajectory remains contingent on the resolution of underlying stressors like trade policy and global conflict.

 

Reference:
Tom McClellan (March 6, 2026) - Extreme Backwardation in VIX Futures.
Tom McClellan (March 6, 2026) - Iran War Brings Severe Oil Futures Backwardation.

 

McCelllan Oscillator vs S&P 500 as of March 6, 2026.
 

See also:

Nicholas D. Savino (March 1, 2026) - S&P 500 Forecast for March 2026.

Jeffrey A. Hirsch (February 25, 2026) - February Stock Market Performance in Midterm Election Years.    
Branimir Vojcic (February 23, 2026) - VIX Cycles: Forecasting Volatility Peaks Through 2032.