Despite VIX Spikes and $100 Oil, Traders Are Surprisingly Bullish on SPY Right Now

SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 1.28% over the past week and 2.54% over the past month, sitting at $668 as of Thursday morning. Oil briefly surged after US-Israeli strikes on Iran rattled energy markets. Yet Reddit’s retail trading community sits at a sentiment score of 68 out of 100, firmly bullish. The divergence between macro fear and retail confidence is the story right now.

Oil Spiked, the VIX Rose, and Traders Bought Anyway

WTI crude climbed from $71 a barrel on March 2 to $94.65 by March 9 in a single week, after the Strait of Hormuz was effectively closed and Iranian energy infrastructure was struck. Brent briefly touched elevated intraday highs before pulling back when Trump signaled the conflict was winding down. The VIX rose 39.6% over the past month and sits at around 24, placing it in the 88th percentile of its 12-month range. That is elevated but well off the above 52 panic reading seen last April. Traders appear to be reading the current spike as noise rather than a structural shift.

Consumer sentiment tells a different story. The University of Michigan index sits at 56.4 as of January 2026, approaching recessionary levels. Retail traders on Reddit are operating with a very different risk calculus.

SPY’s Reddit sentiment score currently stands at 68 out of 100, reflecting a firmly bullish retail outlook despite macro headwinds.

SPY Bulls Are Betting Against the Fear, Not With It

Activity across r/wallstreetbets, r/options, and r/stocks has split along community lines. Broader investing subreddits lean bearish, citing concerns that the S&P 500 could drop if oil stays elevated and analyst calls to wait for a dip before buying. WallStreetBets is doing the opposite, with traders actively shorting volatility via large VIX put positions.

The clearest window into this contrarian positioning comes from a recent WallStreetBets post titled “$30,000 VIX Puts” by user _DangerousFreedom_:

$30,000 VIX Puts
by
u/_DangerousFreedom_ in
wallstreetbets

“Seeing as probably 90% of people on this sub told me in my original post the $30,000 SPY Put position I entered before the Iran War cooked off would send me to Wendy’s or to Allah himself (walked away with $40,000), I figure there’s a good chance that if you reverse the comments on a post in this sub, there’s a good chance of leaving with at least some profit.”

The Oil Level Is the Pivot Point for SPY

The key variable is whether oil consolidates below $100 or re-accelerates if Middle East tensions flare again. SPY’s one-year gain of 21.66% gives the index meaningful cushion. If WTI holds below $90, the conditions that drove the sentiment recovery stay intact. A move back above $90 alongside a VIX above 30 would be a different situation entirely.

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