ANDREW GIOVINAZZI
October 17th, 2025
Yo Pit Crazies,
Let me start with a question…
What does it mean when volatility is high, yet the market barely moves?
I ask because today the VIX started the day at 29 and fell to 20, all while the S&P 500 churned, ending up only 0.5%.
This is crazy volatility for as little overall movement as we’re getting now.
Sure, stocks are churning up and down… up and down. But volume today was about half of a typical day.
We should expect a bigger market move with such low volatility.
But, that didn’t happen.
That is a sign of no liquidity.
The Jello Market Explained
When I say this is a jello market, here’s what I mean: When you were a kid, jello was a mold. It looked solid sitting there on the counter, kind of like the market you’re seeing on the screens when you’re trading. But what happens as soon as you start moving it a little bit? It starts to jiggle. You touch it, put your finger in it, and your finger slides all the way in. You can pull it right out again.
So what appears to be solid and liquid (no pun intended) is actually very squishy and movable. That’s what I’m calling a jello market. It’s there, stocks are at relatively high prices, but there’s not a lot of “there” there.
Why We’re in a Jello Market
There are a couple of reasons for this right now. We’ve had several items that have gone off in a row:
Item #1: The shutdown looks like it’s going to go on forever as both sides dig in.
Item #2: The on-again, off-again tariff war.
Item #3: A tiny bank scare as a large creditor went bankrupt.
Now, by the middle of the day, a couple of those items went away.
The administration is talking with China, and the credit problems are getting addressed as banks raise loan loss reserves. For now, the bank and tariff situations don’t look like a catastrophe. Sure, that can change. But for now, it looks like investors are satisfied.
The Real Issue: The Shutdown
The ongoing continued lift in VIX, which the chart above showed, is related to the shutdown. This whole thing is like a mini-referendum on healthcare costs and how much the government is going to spend on it.
Currently – and I think this debate is one that Frank will cover next week – the debate is really over what are the permanent and temporary costs to the Affordable Care Act.
These temporary subsidies make the ACA look affordable. Take them away, and the reality shows healthcare is super expensive.
The fight in congress is becoming less about the subsidies and more about how to fix what the subsidies are disguising.
What This Means for Equities
What this does for equities is leave a very large undecided factor out there, which traders are having a hard time pricing into the future.
That’s why we have our current jello market.
Opportunity in the Chaos
This is also a good time.
A lot of great stocks are getting no love. Amazon Inc. (AMZN) is one of them. It’s the largest retailer on the planet and just so happens to fit right into the Make America Healthy Again with its move into Whole Foods, healthy choices and drug kiosks for low cost prescription medication.
Plus, all this short-term volatility makes it cheap.
That’s why I’m buying more for my personal account.
With all this volatility bringing better prices for long-term ideas, it’s a great time to take a look at my Flash 7 service.
I look at open interest on options to figure out which stocks to buy, and then play Long Term options on them.
It’s done extremely well. Better than anything else I do, quite frankly.
It was back tested over the last five years. It never lost money once.
Pretty crazy if I say so myself.
Thanks everybody!
AG