DJT was a single digit VIX President, will it be so again?

BY ANDREW GIOVINAZZI

December 3, 2024

Yo Pit Crazies,

We talk about VIX all the time and you can learn more about that here, but the reason is that it helps to describe the sentiment in the market.

The lower the VIX, the more certain the market is of direction

The higher the VIX, the more uncertain the market is of direction

As of today, VIX made a low not seen since before August 5th.

6 month VIX chart

Not only that we have had 6 straight red candles as VIX drops post Ukraine scares. How VIX drops is described by the real time snap of volatility in the Skew-o-later below. What happened was the closing IV was the black line traded up to the blue line early in the day on Monday, mostly from the Weekend Effect then traded back down to -.17 OR 13.34 VIX on the day where the orange line sits. Today, VIX will take the orange line as the new 1 day IV.

IV per strike for SPX Dec31 cycle used in the VIX calculation

That is where things get interesting

Right now DJT is spelling out his agenda with his cabinet picks

This was something Frank Gregory talked about in Special Situations prior to the election. It is playing out in real time. The more traders see, the more they can place their bets and that will drive volatility lower. That is how a bull market can run. VIX going down to new lows, while difficult to believe is happening. I expect that this week.

Biden even pardoned Hunter, famous for dodging the laptop. Heck he might even pardon DJT. That will be a surprise no one expected.

To learn more about pricing expectations, do that here.