BY ANDREW GIOVINAZZI
April 23, 2025
Yo Pit Crazies,
So imagine my surprise when stocks jumped 2% on my first day back from vacation. The Standard and Poor’s 500 Trust ETF (Ticker: SPY) ripped as President Trump walked back the 125% tariffs or whatever number he came up with last week. Earnings just became interesting since what companies make could matter again.
For today, VIX hit a low since the full scope of the Global Tariff Regime came into effect. Way back on Apr 3rd, VIX jumped into Zone 4 and has since been there for 20 days. In and of itself, VIX has jumped to Zone 4 before and stayed there for quite some time, at least 2 weeks on many equations.
My general rule is do not buy VIX puts in backwardation. What is backwardation you say? And why not do that?
Backwardation is the reason stocks are not getting back to 600 SPY anytime soon and staying there.
There is one more thing. And it’s starting to look bullish for SPY, even on an up day.
VVIX is Nearing 100 Again
What really sent VIX into orbit and stocks below 500 SPY was the never ending tariffs Pres Trump was placing on any country with a trade deficit with us. There are a lot of headlines like this below hitting the wires:
VVIX is the Vol of Vol and today drifted below the Terrible Tariff Day lows. If the WH is floating balloons on the downside it is comfortable with lower tariffs than stated with or without a deal.
That is where we find ourselves. While I am not saying it is over, VIX could find its way out of Zone 4 by the end of next week if this action keeps up. The headline flow is improving, Chairman Powell is staying so if only Congress can cut a few bucks we might have something.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
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