Yo Pit Crazies,
AG’s alter-ego Vol Man here with my weekly analysis. As usual, I start with my last forecast.
If my Option Volatility Jargon is vexing, tap our Glossary here.
Last Week’s Big call for Apr 02
The Iran Conflict keeps going. Progress in the USA keeps going even if Tech Investors are bailing on high value names. I expect more of the stairstep down with SPY touching 630s and VIX jumping into the low 30’s. Much like this week, it will be a daily grind down. I think an exception would be the Marines securing the Strait of Hormuz. At that point things would turn around in a hurry.
The Weekly Wrap Up
Well, well VIX traded to the low 30s and SPY to the 630 so we stepped down and my prediction was dead on. That all changed when there was peace afoot as Pres Trump hinted there was an exit strategy. By the end of the week, that was in flux but still stocks managed to trade higher by the end of the week. Most traders see that there is a resolution brewing down the road and could be in as little as 2-3 weeks.
US Oil Trust (Ticker: USO) is still on a heater, making fresh highs as what I believe was some vicious short covering after traders thought a deal was imminent. Pres Trump made clear they will stay in for a solution in his speech and that freaked traders out, causing some short covering.
USO Chart for the last 3 months
In the meantime there has been some decent economic news coming out but the overall market is in the shadow of the events in the Strait of Hormuz. The SOH will dominate short term trading in the markets for the foreseeable future. On a side check out what is happening in the SCOTUS.
Mini Rant
One thing that appears to be slipping away is US Sovereignty. SCOTUS is listening to challenges on Birthright Citizenship and the 14th Amendment framers put language to exclude aliens but sadly it is not clear enough. Taxes are going to fraud and no one is minding the purse on the state or federal level. Politicians think of more ways to raise revenue yet are not accountable at all for how they spend it.. All the massive spending threatens US sovereignty too! Folks think the USA is so successful we can forget laws and property rights when those are really the things that got us here in the first place.
My Sibyl scanner is picking up a bunch of stocks making 52 week lows that could be poised for a bounce. Check that out.
(Every Friday, The Options Insider Radio Network’s Vol Views offers bonus volatility insights with either Mark or myself, no charge!)
SPY daily price action over the last 30 days with one-day candles. SPY Sigma (volatility per term) for Apr, May, Jun
SPY closed at a fresh 3 month low only to bounce like a rubber ball to the tune of 20 SPY points or over 3% in a day or two. Even after Pres Trump’s address to the nation, stocks sold off Thursday but recovered to unchanged. I am not saying we put in a bottom this week but at least on the SOH question it feels like we did it. SPY closing near a week high with oil at highs is very bullish SPY in my view.
Sigma volatility ended the near the lows of the week. Another good sign for stock bulls.
SPX Realized Volatility snap on Apr 02, 2026
Here’s what realized volatility means: It measures how much a stock actually moved over a specific time period. Think of it like checking your car’s odometer after a road trip. The odometer tells you how far you actually traveled, not how far you planned to go. High realized volatility means big price swings. When SPY has high realized volatility, the market is unstable and prone to sharp drops.
SPY realized volatility finally caught up to the gravity of the conflict to jump to near 24 for the last 10 days. Traders finally got nervous and sold stocks and bought them back again in a fury.
VIX Volatility Curves
Closing VIX cash and curve Mar27
Closing Curve Apr02
The VIX curve is in slight backwardation. All the short term VIX futures are higher than the long term VIX futures. That means traders expect VIX to jump in the short term or at least keep the move going higher.
However all the futures and VIX cash are about $1.00 apart so that is what I call a flat curve. That means VIX is likely to move big next week, but up or down. Expect bigger moves in SPY too.
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OP VIX Zone Watch
VIX ZONE 1 9-13
VIX ZONE 2 13.01-17.99
VIX ZONE 3 18-23.99 We touched here
VIX ZONE 4 24+ ← We lived here
VIX did not trade in Zone 3 until after the bell Thursday and for a brief moment Wednesday. I expect we continue to hover around 24 for at least another week since that is what has happened since Mar 03.
VIX 30-day chart with one-minute candles
VIX losing the higher numbers is always significant. While VIX will continue to orbit around 24 until the SOH is clear, we are not getting escalations in the conflict. At least from the market’s point of view.
The Big Call
The Iran Conflict keeps going. I expect at least one trip down to 640 or lower next week as the conflict will likely intensify as Pres Trump tries to get Iran to the table. Any deal to open the SOH, and SPY is 665 -670 in a heartbeat with VIX to 21 or lower.
To Your Trading Success,
Andrew