BY ANDREW GIOVINAZZI
March 28, 2025
Yo Pit Crazies,
Stocks dropped 2% today as traders reacted negatively to the Michigan Inflation Sentiment indicator, despite its history of being inaccurate. There’s also a decrease in projected U.S. government spending entering the forecasts, which is adding to traders’ frustration.
The stocks that took the biggest hits today were the same ones that performed the best in 2023 and 2024 — the MAG 7 tech giants. Traders are leaving those names and running to European Equities. Go figure. One stock I mentioned last night, Tesla Inc. (Ticker: TSLA), got smacked a bit even after Elon Musk gave a nice interview with Bret Baier, where he discussed D.O.G.E. ‘s goal of cutting $1 trillion in waste from the U.S. government.
Maybe TSLA will be a good one to look at using Hans’ new income strategy – check that out here. Stocks are definitely moving around prior to the April 2nd Freedom Day deadline. In fact, income strategies that aren’t focused on market direction should perform well right now. Why? Because the S&P 500 Trust ETF (Ticker: SPY) is volatile but essentially stagnant, and income strategies thrive in that kind of environment.
SPY 30 day chart
We have a date with Freedom Day next week and this is why I think it will make one of the best trading opportunities of the year….
We got a VIX gift late this week
VIX jumped from 17 earlier this week to near 22 by the close on Friday. Typically, the market would settle on a VIX level early, around 17, and then push it lower after the event. However, this time we saw an additional 4-point spike in the VIX, meaning it has that much further to drop once the event is over.
VIX 30 Day Chart
The VIX bid should hold, or close to it, until Apr 2nd, when the major news breaks and stocks can focus on the next challenge. Traders have pushed the SPY within 7 points of the low from two weeks ago, despite the VIX being 8 points lower. This suggests that traders are accepting a lower trading range for SPY for the time being. After April 2nd, it will also be easier for the VIX to return to 17.
That should be a great setup for next week.
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
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PFE May17 26 calls closed for a 66% win
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OPTION SHOPPER: ERX Mar28 65 calls closed for a 90% gain