A positioning-driven rally in Infosys and the renewed compression in volatility point to the same underlying dynamic: market mechanics are overpowering fundamentals. Infosys’ sharp surge was fueled by tight borrow conditions and forced short covering rather than earnings strength, leaving upside increasingly dependent on fresh fundamental buyers as the squeeze fades. At the same time, the VIX’s drop back toward multi-month lows reflects systematic volatility selling and reduced hedging demand, not a cleaner macro outlook. Together, these moves underscore growing asymmetry—mechanical support remains in place, but crowded positioning and compressed volatility heighten fragility, increasing the risk of outsized moves once liquidity or sentiment shifts.
