BY ANDREW GIOVINAZZI
September 18th, 2025
Yo Pit Crazies,
Markets came out swinging this morning after traders soaked in the big Fed news—rate cuts are likely on the horizon. We gave you a heads-up yesterday, but here’s where things got interesting…
What didn’t happen:
- The SPDR Gold Trust (GLD) didn’t rally
- Tech didn’t tank
- Big dividend-payers didn’t budge
Some of the moves I expected just didn’t show up.
Things that I thought should happen did not happen.
But this was the biggest surprise.
SPY got a 10 point range in less than 24 hours
Did you miss it? You would’ve needed to buy the bottom and sell the top to nail the full range—but the opportunity was there. Traders still think the SPDR S&P 500 Trust index is going to collapse. Now, the buzz is growing: speculation is rampant that SPY is set to crash and markets are wildly overvalued.
SPY chart of the last 5 days
I expected VIX9D to dip back below VIX—and it delivered.
Here’s what’s not happening: The extra cost for risk between actual market moves and the VIX isn’t really shrinking.
Take a look at the chart below:
SPY 1 year chart with 30 day implied volatility and 10 day realized volatility
I thought traders would feel more confident and push option prices down by at least a full point on Thursday. But that didn’t happen.
As of now, VIX is only down 0.18 on the day—even after a major FOMC announcement and a strong move higher in stocks. That’s not the reaction I’d expect.
I’ll give it another day, but we should be seeing a more significant drop in the VIX.
If that doesn’t happen, I’ll start positioning for a potential reversal in SPY.
To Your Trading Success,
AG