BY ANDREW GIOVINAZZI
February 19, 2025
Yo Pit Crazies,
The S&P 500 Trust ETF (Ticker: SPY) is trading at all time highs. Bond yields, Ukraine, inflation, US Gov deficits, DJT taking office all are forgotten and swept behind as investors still want stocks. The most important part of this is SPY is making highs without the biggest of Mega Cap Tech making highs.
The rest of the market is finally helping. SPY has tried 3x to break out and every time it has been thwarted.
SPY 3 month chart
The issue for me is there is a big part of the rally in SPY that is missing. I feel we are going to see it pop its head out of the hole this week and into Friday.
SPY is missing the lowest quartile of volatility!!!!!!
All time highs are great but to get the rally to have legs I want to see some willing sellers in SPY. Traders who really feel the rally and thing puts are grossly overvalued. I also want to see less intraday movement. Later stage bull markets have boring streaks because investors have confidence. That breeds lower volatility. It is too early in Trump’s second term but a fast drop in volatility will generate confidence.
1 year SPY chart with IV30 and IV60 on the bottom
The green trend line is the current VIX. Believe or not that is the 40 percentile of IV. There is plenty of room for IV to drop if the confidence builds.
I think we will close at all time highs this week, new ones, if VIX can drop to 14 quickly.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
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