Yo Pit Crazies,

Just yesterday, I alluded to the VIX index and VIX futures separating. Well, that happened today.

VIX dropped away from the futures (meaning the spot fear gauge fell while the futures stayed elevated, a sign traders expect calm ahead) and traders breathed a sigh of relief as Israel and Lebanon started negotiations to disarm Hezbollah.

A job Israel is likely happy to help make happen

VIX three month day chart with VolMan highlights

That also got stocks jumping as behind-the-scenes negotiations are taking place regardless of what the media is saying. It also made Vozie's Game Plan print 100 percent gains today.

If interested, check out this special offer for Voz’s game plan here.

The Impossible Might Become Possible

VIX is trading at the low point of the conflict.

Lower VIX is a sign of lower volatility ahead, at least that is what the market thinks.

Current oil delivery is tight, but VIX does not care. SPY is back to $680, which it has not touched since the first week of March. 700 SPY is now only three percent away.

Traders have a lot of confidence that the deal will get done. I did a bit of upside SPY call buying today to hedge.

Here is what I want to see. I want VIX to drop into the weekend. That would help get SPY moving higher next week.

All of a sudden, news can change anything in this market, and that means believe the rallies in SPY instead of fading them.

To your investing success,

AG