BY ANDREW GIOVINAZZI
March 24, 2025
Yo Pit Crazies,
There is nothing like the snap below to get the old heart pumping. I also find myself appreciating the “nibble strategy” of buying stocks when they drop by 10% or more – buying some of my favorites even though sometimes it is hard to remember to do that. I added some Tesla Inc (Ticker: TSLA) last week for around $250, only to see it trade $220 and now $270.
And now out of the blue, President Trump might go easy on some countries that have tariffs levied against us already. Did you know that all the countries President Trump wants to impose tariffs on already have tariffs on us? It’s true, and ironically, Uncle Sam also sends them money and pays for their defense costs. It is no wonder the USGOV is going broke. Pres Biden never rolled back the China tariffs, so where does that leave us now?
I do believe we will get some back and forth for a while. This might fit an income strategy better than the standard “buy ‘em and watch the options go straight up” like in 2024. Hans Albrecht has something to say about that this week at 7pm. He has some insight into what makes the perfect income trade and how to get in and out of it.
Friday in this very newsletter, I talked about the lack of the S&P 500 Trust ETF (Ticker: SPY) going lower and the VIX not going higher. Both of those trends continued today. I am not going to say market Tariff Tantrums are done, but they sure feel like it.
VVIX just capitulated
All of these groovy “V” indicators like VIX9D, VVIX, and the volatility of VIX give an impression of market sentiment. When traders think the world is going to end, VVIX rockets. When traders think it’s all unicorns and rainbows, VVIX tanks.
This chart below is the path of volatility of VIX and VVIX and it has imploded to lows for the month. Basically, traders just said we are not buying crazy upside calls in VIX all at the same time. What was hot, hot, hot just two weeks ago is cold, cold, cold on Monday.
30 day VVIX chart with 1 min candles
DJT just said we may give countries breaks on tariffs. To traders, this means there is some wiggle room in the tariff policy and this leg of the market selloff is likely over. Great 8 is still pricey so I think the rally will have to come from somewhere else. This means lower VIX and long volatility holders could get cooked.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
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CAPITOL GAINS: SMR Aug16 7 call closed for a 150% gain
DELTA STRIKE: VLY Mar15 8 puts closed for a 88% gain
PFE May17 26 calls closed for a 66% win
OP MENTORING: SPY Mar22/19 510 put calendars and 520 calls for 6.4% gain
OPTION SHOPPER: ERX Mar28 65 calls closed for a 90% gain