BY ANDREW GIOVINAZZI
September 25th, 2025
The revised second quarter GDP estimate showed our economy doing way better than expected. The number ticked up to 3.8% from the original estimate of 3.3%.
That’s a big jump!
My guess is that companies got ready for post-tariff madness early in the second quarter, looked around, saw things were okay and moved forward.
Despite the positive news, stocks traded down. This is one of the times when good news isn’t good for investors. Investors want the Fed to keep lowering rates. If the economy’s doing good, rates are less likely to move down.
Why ease when you don’t have to? Especially when inflation keeps moving higher.
What’s truly surprising isn’t the great GDP revision or that stocks fell… it’s that the VIX lied to me.
I think it’s because of the Personal Consumption Expenditures (PCE) number tomorrow.
Here’s the Deal…
The SPY normally moves one percent per day when the VIX is at 16.
VIX is closer to 17 right now, so I would expect at least one percent.
But that didn’t happen. Heck, it moved less than .80%.
SPY 5-Day Chart
The VIX is really playing games with us.
It’s pricing the PCE inflation number and the potential U.S. Government shutdown, but not how the market is moving today.
Stocks really don’t want to sell off. That might change tomorrow morning, but as of the close, the VIX’s red flags aren’t convincing investors to sell their shares.
Ultimately, I trade what’s in front of me.
I got mediocre SPY put prices today because the selloff didn’t hold and I don’t want to hold too many SPY put spreads after the PCE number tomorrow.
The VIX will eventually drop, but for now, we’ll just have to look past this fib until then.
To Your Trading Success,
AG