Nasdaq 100 crossed 27,000 for the first time in history. The AI software index surged 8.7% in a single session. Those numbers look like euphoria, and by most historical measures they qualify.

What I am watching is whether the VIX (the volatility index) term structure is pricing risk appropriately alongside this move. When AI software indices spike 8.7% in a day, short-dated implied volatility typically rises as dealers hedge gamma exposure. If VIX stayed suppressed through Tuesday's session despite that magnitude of move, the rally was mechanical, driven by positioning unwinding rather than broad market conviction. A suppressed VIX at an index all-time high with narrow sector breadth is the specific setup where a modest catalyst produces a disproportionate drawdown. I am not predicting that outcome. The conditions for it are present, and that is enough reason to watch the VIX term structure carefully over the next few sessions.