Yo Pit Crazies,

Alphabet Inc. (Ticker: GOOGL) reported earnings Tuesday night and they were decent enough not to create a total market collapse.

Hey, that’s something!

The tech giant reported revenue gains even with a bit less profit than expected. Still not bad considering how bad the sentiment was after Snap Inc. (Ticker: SNAP) crushed Big Tech last week. 

Good news is good news, and that should help start to reduce market volatility …

But first, the market is expecting the worst as the Fed prepares to set rate policy.

What is the VIX saying?

VIX Cash Rose, but VIX Future Barely Moved

“Why is this important to me,” you ask?

Well the reason is, when VIX moves and the futures don’t that is more indicative of front-term volatility moving higher than the back month volatility.

You see, traders are using the FOMC as a pretext to raise volatility and the public is buying.  To give a clue the S&P 500 is expecting a $100 move by Friday.

Below is the Edge Hunter Vol Dashboard our Pro Students use. Note the red circles with the theoretical value of the VIX future far below where it should be …

Theoretical Value of Futures vs. Actual Future Value

The big reason why is that VIX is up near $2 from Friday’s close  but the VIX August future has barely moved.

As a matter of fact, the VIX Aug future was only 25.58 on Friday.

This indicates that short-term IV is rising but the back month IV is staying flat. These the hallmarks of a big move coming in SPX

And this will set up a great SPYMaster Trade for Wednesday. 

Bring on the Fed!

(And bring on the Hedge Fund Recession Profit Plan on Thursday night.)

To Your Trading Success,

AG