[OP Ed. Note: This Editorial Was Drafted Without AI]
Yo Pit Crazies,
No spiky sandals today. So far the chickens aren’t eating the grass seed, and the threat of a hose seems to be working. It’s not unlike summertime in the big city, when little kids run through an open fire hydrant. The water goes on and the kids, and the chickens, scatter.
Right now we’re not getting scatter plots or connect-the-dots out of the new Fed. Chairman Warsh is going with the data and hopefully won’t get caught in the transitory trap. He even told a crowd in Bangkok this month that the Fed doesn’t tip its hand before meetings anymore.
Traders are betting on no hike Wednesday, and Kalshi has the odds of a hold at 93%. The bond market already did the heavy lifting. It got Uncle Sam to pay a cool $80 billion more in interest last year, and the bill hit a record $1.05 trillion.
But just as soon as the Fed started raising rates, they’re likely done. A flat or no-hike policy is generally good for stocks. So why’s VIX so darn high?
Flat VIX Curve Is Pricing Three Events
We’ve got:
- The FOMC decision (Wednesday)
- The midterm election (next Tuesday)
- The Anthropic IPO (mid-November)
Any of those can move the SPDR S&P 500 ETF Trust (SPY) 1% to 3%. You think the Anthropic IPO is no big deal? Anthropic filed its paperwork Monday, and chip stocks ripped on the news alone.
And remember June? SPY ran 4%, crashed 5%, and ran 4% once the SpaceX (SPCX) IPO launched.
..
VIX Curve 10.27.2026
The front two months of the VIX curve (VIX futures prices lined up by expiration month) are very flat. November and December futures sit within a dime of each other, right around 19. Normally, the later months cost more, so when they line up like this, traders expect fireworks soon.
In fact, before most big VIX moves, the curve goes flat going into a news event. We’ve got three over the next three weeks. SPY is going to do crazy things.
You can learn to trade that here.
I hope this was helpful,
AG