BY ANDREW GIOVINAZZI
June 4th, 2025
Yo Pit Crazies,
Another snooze fest today with the SPDR S&P 500 Trust (Ticker: SPY) and a 17.50 VIX—stocks should be moving, right? Anything really. On that note, don’t miss Voz and Hannah tonight at 4:30 PM ET as they make the most of this slow week!
In the old times, the Norse and Danes would throw the runesticks to seek the gods’ guidance on matters of marriage, battle, and adventure. Fast forward to 2025, and while some diehard runesticks may still hold on to tradition, traders now have more practical tools at their disposal.
Bonds are rallying on this CBO stamp that came out this week:
The problem is, the VIX runes aren’t convinced.
Here’s why….
Longer Term VIX future prices are very high
I’m seeing contango values for the VIX that would typically align with a VIX around 12—where the VIX futures are trading higher than the spot VIX. A 12 VIX falls within Zone 1, and historically, 75% of VIX movements happen above that level. In Zone 1, higher futures values are normal. The issue now is we’re at the top of Zone 2, and implied volatilities (IVs) are still extremely high, particularly in July and beyond. To me, that’s unusually elevated.
Short-term VIX remains pricey, especially considering the slow grind higher over the past week. Traders are still pricing in increased volatility for July and beyond, which makes me question how much longer this rally can hold. I’m still leaning toward SPY hitting 600 this week, but I’d feel more confident if long-dated VIX futures came down—and if my indicators weren’t flashing so much green.
Whether the market’s up or down, Hannah and Voz are going live at 4:30PM ET to break down the big moves. Don’t miss it!
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
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