BY ANDREW GIOVINAZZI
March 31, 2025
Yo Pit Crazies,
Stocks made a strong comeback today after opening down more than 1% for the S&P 500 Trust ETF (Ticker: SPY) — in fact, it was nearly 2%. However, the rally was short-lived as the well-known JP Morgan SPX puts at 5565 expired worthless. This morning, the puts were priced around $100, only to end the day worthless as traders bid stocks higher from the open and never looked back.
The bounce in stocks is still real and keeps happening. If I want to shift my options further from the market, I have Hans Albrecht’s Turbo Income Trader to consider. However, I’ve noticed that we keep making new lows before bouncing back, and we’re not quite out of that cycle yet. VIX did manage to hit Zone 4 today in the morning and trade above 24 briefly, but quarter-end buying helped pull stocks back up.
5-Day SPY Chart
We’re now firmly in a pattern of selling and rallying, selling and rallying, only to hit new recent lows. There’s a clue below to help determine if we’re finally out of this cycle.
What does that big red circle mean?…
…That there is still massive uncertainty around Liberation Day
It’s worth noting that there’s very high sigma volatility, with average volatility for the expiration around April 2nd. Traders are anticipating some significant news around that date. According to the White House, major tariffs are set to take effect at midnight on April 2nd, which is why traders expect something to happen by then—possibly a reversal or a shift in stance.
I expect SPY and VIX will move in a binary manner through the 3rd and 4th. We could either see a new leg up to 500 SPY or 575 and beyond. This Trade War uncertainty has certainly made Q1 of 2025 a memorable one.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
See what's hot at option pit
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
VIX 30 Day Chart