COMPLETE REVERSAL -- morning relief rally has been annihilated. SPY from +0.45% high to -0.36%. VIX recaptured 27.
MIDDAY PULSE
Date: Friday, March 13, 2026 Time: 1:07 PM ET — Afternoon session Day’s Trajectory: COMPLETE REVERSAL — morning relief rally has been annihilated. SPY from +0.45% high to -0.36%. VIX recaptured 27.
MIDDAY MARKET SNAPSHOT
Index Levels — Morning Gains Erased
| Index | Prev Close | Morning High | Current (1:07 PM) | Change | Intraday Swing | Volume vs Avg |
|---|---|---|---|---|---|---|
| SPY | $666.06 | $672.34 | $663.67 | -0.36% | $9.23 range | 49.0M / 83.2M (59%) |
| QQQ | $597.26 | $603.60 | $594.12 | -0.53% | $10.17 range | 37.9M / 60.9M (62%) |
| DIA | $467.48 | $472.10 | $467.20 | -0.06% | $5.29 range | 4.8M / 6.5M (74%) |
| IWM | $247.41 | $250.61 | $245.94 | -0.59% | $4.98 range | 31.9M / 40.5M (79%) |
SPY has fallen $8.67 from its intraday high of $672.34 to $663.67. This is now BELOW Thursday’s close of $666.06. The gap-up has been completely filled and prices have broken to new session lows. IWM leading the decline at -0.59%, confirming risk-off — small caps are the first to be sold.
Volume is accelerating sharply — SPY at 59% of daily average by 1 PM vs. 21% at 10:39 AM. Institutional selling is hitting the tape.
VIX — Re-Spiked
| Metric | Opening Range (10:39 AM) | Now (1:07 PM) | Change |
|---|---|---|---|
| VIX | 25.56 (-6.34%) | 27.33 (+0.15%) | Reversed from -6.34% to FLAT vs. close |
| VIX Day Range | 24.67 low | Now near 27.33 | Back above yesterday’s close of 27.29 |
| UVXY | $48.97 (-3.64%) | $51.61 (+1.55%) | Flipped from -3.64% to +1.55% |
VIX has swung from a low of 24.67 to 27.33 — a 2.66 point intraday reversal. UVXY has gone from -3.64% to +1.55%, a 5.2% swing. The vol compression from this morning was a trap. Weekend risk is being re-priced.
Sector Performance — Everything Rolling Over
| Sector | ETF | Morning (10:39 AM) | Now (1:07 PM) | Delta |
|---|---|---|---|---|
| Utilities | XLU | +1.52% | +1.29% | Fading but still best |
| Consumer Staples | XLP | +0.72% | +0.87% | Only sector strengthening |
| Real Estate | XLRE | +0.81% | +0.70% | Holding |
| Financials | XLF | +1.05% | +0.48% | Cut in half |
| Healthcare | XLV | +0.65% | +0.32% | Fading |
| Energy | XLE | +0.06% | +0.21% | Firming — oil bouncing |
| Communication Svcs | XLC | +0.36% | -0.82% | FLIPPED RED |
| Industrials | XLI | -0.04% | -0.35% | Worsened |
| Materials | XLB | -0.12% | -0.35% | Worsened |
| Technology | XLK | +0.55% | -0.59% | FLIPPED RED — biggest reversal |
The defensive rotation that was “concerning” at 10:39 AM is now fully confirmed. Only three sectors remain green: Utilities, Staples, and Real Estate. Technology has reversed from +0.55% to -0.59%, a full 1.14% swing. Communication Services dropped from +0.36% to -0.82%.
Treasury Yields (Last close data: Mar 11)
| Maturity | Mar 11 Close | Intraday Signal |
|---|---|---|
| 2-Year | 3.64% | TLT (20Y+ bond ETF) at $86.50, -0.54% — bonds selling off |
| 10-Year | 4.21% | Yields likely pushing higher intraday |
| 30-Year | 4.86% | Long bonds under pressure |
TLT down -0.54% to $86.50 from $86.97 is notable — bonds are selling alongside stocks. This is NOT a flight-to-quality setup. It is a “sell everything” environment: equities, bonds, and gold all declining together. This screams forced de-leveraging and margin-driven liquidation.
Crude Oil & Commodities
| Asset | Morning (10:39 AM) | Now (1:07 PM) | Delta |
|---|---|---|---|
| USO (Oil) | $116.19 (-1.86%) | $118.29 (-0.08%) | OIL BOUNCING — nearly flat now |
| GLD (Gold) | $467.24 (+0.08%) | $463.81 (-0.66%) | Reversed to red |
| HYG (HY Credit) | $79.53 (+0.23%) | $79.17 (-0.23%) | Flipped to red — credit stress |
| LQD (IG Credit) | $108.81 (+0.22%) | $108.12 (-0.41%) | Flipped to red |
USO has recovered from its -1.86% morning dip to nearly flat at -0.08%. Oil is firming back toward $95+ as reports of Iranian drone swarms hitting Gulf energy infrastructure hit the wires. Gold has reversed from green to -0.66% — liquidation selling, not safe-haven buying.
Credit is deteriorating. HYG flipped from +0.23% to -0.23%, and LQD from +0.22% to -0.41%. This is the most important signal: when credit starts selling with equities, the selloff has legs.
Crypto
| Asset | Morning (10:39 AM) | Now (1:07 PM) | Delta |
|---|---|---|---|
| BTC | $73,506 (+4.22%) | $71,975 (+2.05%) | Gave back half the rally |
| ETH | $2,191 (+5.66%) | $2,136 (+2.98%) | Gave back half the rally |
Crypto is fading with equities. BTC dropped $1,500 from session highs. Still green but the momentum is gone.
POSITION MANAGEMENT — CRITICAL UPDATES
Active Trade Ideas — Status at 1:07 PM
| # | Trade | 10:39 AM Status | Now (1:07 PM) | ACTION REQUIRED |
|---|---|---|---|---|
| 1 | VIX short (UVXY puts) | WORKING — UVXY $48.97 | STOPPED OUT — UVXY $51.61 (+1.55%) | EXIT IMMEDIATELY. VIX reversed violently. UVXY is above yesterday’s close. This trade is underwater. The vol compression was a trap. |
| 2 | Exit tankers (STNG/FRO/DHT) | Exit on bounce | STNG $67.20 (-0.33%), FRO $30.46 (-1.01%), DHT $16.94 (+0.59%) | EXIT thesis weakening. Oil is rebounding, tankers will follow. If holding, set tight stops. Consider reversing long if Hormuz closure hardens. |
| 3 | Long EWY (South Korea) | +2.95%, stop $126 | $125.66 (+1.75%) — pulling back | STOP HIT at $126. EWY broke below $126 (now $125.66). If you followed the $126 stop, you are out. If still holding, consider $124.50 as last-resort stop — the intraday low is $124.58. |
| 4 | Short ADBE (CEO exit) | Covering partial at -6.13% | $253.96 (-5.86%) | Hold remaining short. ADBE is range-bound $247-257 all day. Not moving much relative to market. Cover on any break above $258. |
| 5 | Defense fade (short LMT/NOC) | Working — LMT -1.34% | LMT $649.30 (-0.54%), NOC $736.95 (+0.09%) | COVER LMT SHORT. LMT rallied from $640.50 low back to $649.30. With Hegseth’s comments being contradicted by actual IRGC drone attacks on Gulf infrastructure, defense is bid again. NOC nearly flat — stop is tight. |
| 6 | Long ULTA (mean reversion) | Entry $558-560 | $547.78 (-12.31%) | STOPPED OUT at $553. ULTA has cratered to $547.78 — well below the $553 stop. This is a 2.8x normal volume day. Guidance miss + Friday selloff = no floor. |
| 7 | BTC momentum long | Entry pullback $72,800-73,000 | $71,975 (+2.05%) | STOP at $71,500 is close. BTC at $71,975, only $475 from stop. If market continues to sell, crypto will follow. Tighten to $71,800 or exit proactively. |
| 8 | XLU/XLE pairs (long XLE/short XLU) | Entered on spread | XLE +0.21%, XLU +1.29% | LOSING. Spread has widened, not compressed. XLU still outperforming. This is a losing trade in a risk-off environment. Consider cutting for a small loss. |
| 9 | SPY 0DTE put spread ($665/$660) | Hedge for $1.00 | IN THE MONEY. SPY at $663.67, below $665 strike | This hedge is working. SPY broke $665. The $665/$660 put spread is now in-the-money. If held, this is providing the downside protection intended. Monitor — max value at $660 SPY. |
| 10 | META short | Entry $625, stop $633 | $614.13 (-3.77%) | WORKING WELL. Target was $610 — now $614.13. Move stop to breakeven ($625) or take profits. Only $4 from target. |
Priority Actions
-
EXIT VIX short (UVXY puts) — HIGHEST PRIORITY. The morning vol compression was a head-fake. VIX is back above 27 and rising. Do not hold short vol into the weekend with Iran escalating.
-
EWY stop was triggered at $126. If still holding, the risk/reward is deteriorating. South Korea is being dragged down by the global selloff despite its own positive catalyst (political resolution).
-
Take profits on META short. At $614.13, this is $11 from entry and $4 from target. Do not let a winning trade become a loser — take at least partial profits.
-
SPY 0DTE put spread is IN THE MONEY. This is doing exactly what it was designed for. If SPY hits $660, consider closing for near-max profit ($4.00 on $1.00 risk).
-
Cover LMT short. Defense stocks are catching a bid again on fresh IRGC drone attacks on Gulf infrastructure. The de-escalation thesis from the morning is invalidated.
Options Decay Considerations
It is Friday afternoon — 0DTE options are decaying rapidly. Theta is at its maximum:
- SPY 0DTE put spread: holding because it is ITM
- Any 0DTE longs that are OTM should be closed immediately — they will expire worthless
- For weekly expirations (Mar 14 weekend): no market on Saturday, but any weeklies expiring today need action before 4 PM
INTRADAY DEVELOPMENTS (Since Opening Range at 10:39 AM)
IRGC Drone Swarms Hit Gulf Energy Infrastructure — THE CATALYST
The morning rally’s reversal was triggered by escalating reports of Iranian drone and missile attacks on Gulf states’ energy infrastructure:
- UAE intercepted 7 ballistic missiles and 27 drones on March 13 alone (per Gulf News). Cumulative since war started: 285 ballistic missiles, 15 cruise missiles, 1,567 drones.
- Saudi Arabia intercepted ~50 drones headed toward Eastern and Central provinces, including near the Shaybah oilfield (per Gulf News).
- Fujairah Oil Industry Zone fire in the UAE — Energy Minister confirmed a fire at one of the FOIZ facilities, though UAE energy supplies are reportedly stable (per Gulf News).
- Iran threatened to “set the region’s oil and gas on fire” if its own energy infrastructure is attacked (per Gulf News). This is a direct escalation in rhetoric.
- 16 oil tankers hit by Iran in the Strait of Hormuz and Persian Gulf (per SOF News). Traffic through Hormuz has “nearly come to a standstill.”
- Hegseth’s “no clear evidence of mines” comment from this morning is now being contradicted by the reality of drone/missile attacks that do not require mines to shut down the strait (per Reuters).
- U.S. death toll from Operation Epic Fury reached 11 with a refueling jet crash in Iraq.
This is the key driver: the morning rally was predicated on Hegseth de-escalation. The midday reality is that Iran’s ability to disrupt Gulf energy infrastructure with cheap drones ($20-35K each vs. $4M Patriot interceptors) is creating an asymmetric threat that cannot be quickly resolved.
PCE Data Confirmation
FXStreet confirmed the January PCE release:
- Headline PCE: 2.8% y/y (slightly lower than December’s 2.9%)
- Core PCE: 3.1% y/y as expected
The data itself was not market-moving, but it removes the possibility of a “dovish surprise” that could have sustained the morning rally. The Fed has no room to cut with core PCE at 3.1%.
”Friday the 13th Bloodbath” Narrative Taking Hold
Per FinancialContent/MarketMinute, this session is being framed as a “$1 trillion wipeout” driven by the “perfect storm” of geopolitical escalation plus stagflationary data. This kind of narrative, once established in the media, tends to accelerate selling as retail and systematic strategies respond to the framing.
AFTERNOON SETUP
Key Levels for the Final 2.5 Hours
SPY:
- Resistance: $666.06 (Thursday close, now resistance from above)
- Support 1: $663.11 (today’s new LOD)
- Support 2: $660.00 (the 0DTE put spread strike / psychological)
- Critical: If $660 breaks, look for acceleration toward $655-656 area
QQQ:
- Resistance: $597.26 (Thursday close)
- Support 1: $593.43 (today’s LOD)
- Support 2: $590 (psychological)
VIX:
- Currently 27.33 — if VIX breaks above 28.47 (today’s high), expect another wave of selling
- VIX above 30 would signal possible panic
Pattern Forming: Bear Reversal Day
This is a classic “morning gap-up, sell all day” pattern — one of the most bearish intraday patterns:
- Gap up on hope (oil pullback, Hegseth de-escalation)
- First hour high rejected
- Grinding selloff through midday as real news (drone attacks) contradicts the hopeful narrative
- Afternoon acceleration likely as stops cascade and options dealers hedge
Probability assessment: 65% chance of closing at or near the lows. Friday afternoon selloffs tend to intensify as traders reduce weekend exposure, and the Iran headlines are getting worse, not better.
New Trade Idea — Only If Clean Setup
SPY Weekend Put Spread — CLOSE EXTENSION (Options / Event-Driven)
If you are not already hedged via the 0DTE put spread from this morning:
- Buy SPY Mar 13 $660P / Sell SPY Mar 13 $655P
- Cost: ~$0.80-1.20 depending on timing
- Thesis: Weekend risk is now materially higher than it was this morning. IRGC attacks on Gulf infrastructure are escalating, Iran is threatening to “set the region’s oil and gas on fire,” and market is in selloff mode into the close.
- Time Horizon: Today’s expiration
- Conviction: MEDIUM-HIGH
No other new trade ideas. This is a position-management session, not an entry session. The priority is protecting capital into the weekend.
BOTTOM LINE
The morning relief rally was a head-fake. Iran’s drone attacks on Gulf energy infrastructure, combined with stagflationary PCE/GDP data, have reversed the entire session. SPY has fallen $8.67 from the morning high and is now below Thursday’s close. VIX recaptured 27. Credit is selling alongside equities and bonds — a “sell everything” signal. Priority is risk reduction: exit the VIX short, take profits on META, honor the EWY stop, and let the 0DTE put hedge work. Do not add risk into the weekend. If Monday gaps down on further Iran escalation, there will be better entries on the other side.
SOURCES
- Market data: Finance tools via Perplexity Finance — SPY, QQQ, VIX, META, ULTA, ADBE
- Iran drone attacks on Gulf: Gulf News, Al Jazeera
- Operation Epic Fury update: SOF News
- PCE data: FXStreet
- Hegseth “no mines” comment: Reuters
- Selloff framing: FinancialContent
- Treasury yields: Massive API / Federal Reserve data