Yo Pit Crazies,
AG's alter-ego Vol Man here with my weekly analysis.
As usual, I start with my last forecast…
Last Week’s Big Call
“Monday will be quiet, maybe slightly down SPY with the election looming. I hope the good citizens vote for a divided House and Senate. SPY will recover somewhat on that news, maybe 760 or so. VIX will find 16 again. If there is Dem control of both chambers, SPY and VIX will sell off to the mid 720s and VIX will revisit Zone 4. Do not discount some kind of weekend fireworks. Strap in for a wild few days, we will cover it live.
Well holy gosh we sure got that in spades. We did not hit 720 but low 730s for SPY and we are still trading 24 VIX. We did get to the high 760’s post-election relief rally than the reality set in. Oof.
Exxonmobil Corp (XOM) was a good touchstone for oil prices and it is down around $10 from last week. Into the weekend traders think President Trump is going to get busy in Iran. At this point, he needs to end conflict sooner rather that later now that the election has come and gone. It is hard to imagine a worse result for him either way.
The Weekly Wrap Up
Most of the earnings were very good but traders did not like them. Apple Inc (AAPL) put up a huge number only to sell off. That is what a 30x P/E ratio does on a $5 trillion dollar company. The Mag 7 are a victim of their own success and by the end of the week tried to claw back. Meanwhile the Anthropic IPO continues with a mid-Nov IPO date. That value is dropping to $1 Trillion dollars which is still nuts.
Ultimately the election wipeout by the Democrats put a chill into traders by the end of the week. There was a relief that the country was still here post-election on Wednesday, then investors realized who they actually voted for on Thursday and went Brazil. The first words out of the Dems mouths were halting the data center buildout which is the single biggest driver of growth in the USA besides fossil fuel drilling. Unreal tone deafness by the winning party. People want lower prices and cutting job growing businesses and raising SNAP spending won’t do it.
Mini Rant
We did not get a divided Congress. At this point neither party should have control of both houses since one is useless and the other is stupid. As I write this, there are a lot of questions about the early mail in ballot voting. The numbers are huge and seem hard to believe. Sen Thune doing 0 for 2 years will set the country back for the foreseeable future without secure elections and common sense voting laws.
(Every Friday, The Options Insider Radio Network’s Vol Views offers bonus volatility insights with either Mark or myself, no charge!)
SPY daily price action over the last 30 days with one-day candles. SPY Sigma (volatility per term) for Nov, Dec and Jan
SPY got smoke a la Brazil since it was essentially the same party that won. The AI miracle was cast down and investors sold everything.
SPY Realized Volatility snap on Nov 06, 2026
Here's what realized volatility means: it measures how much a stock actually moved over a specific time period. Think of it like checking your car's odometer after a road trip. The odometer tells you how far you actually traveled, not how far you planned to go.
High realized volatility means big price swings. When SPY has high realized volatility, the market is unstable and prone to sharp drops. When HV10 (realized volatility over the last 10 trading days) is under 10, stocks aren't going anywhere.
10 Day Realized volatility ran over 27% for the highest jump in 6 months. Traders just sold and did not care what got sold. Friday was a realized respite but this week was out of category for the year and truly a turnaround in sentiment around AI.
VIX Curves
Closing VIX cash and curve Oct30
Closing Curve Nov 06
The VIX curve is in FULL BACKWARDATION and folks are plum freaked out. The weekend might hold a bombing raid in Iran or it might not. More importantly, investors are losing confidence in the AI trade. VIX is very unstable up here but pointing to a downward market for SPY.
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OP VIX Zone Watch
VIX ZONE 1 9-13
VIX ZONE 2 13.01-17.99 We visited here
VIX ZONE 3 18-23.99 We raced through here
VIX ZONE 4 24+ We closed here
VIX leapt hard to Zone 4 on Monday despite a post-election sigh of relief. Ultimately the market shows you what it thinks and it thinks more bad action is coming.
VIX 30-day chart with one-minute candles
This chart says it all, which is that we closed near the highs in VIX with little to answer for. To me this means we have a change in sentiment as investors look for something to get bullish about. All good parties come to an end and the AI trade is looking over for the short term.
The Big Call
Sadly, the Republicans had a chance to improve things, even one thing, and really made things worse. The positive jobs number is just a reminder that the AI train needs to keep going. On the plus side, this was a huge year for corporate profits and getting used to the tariff regime of the year before. Voters wanted some balance in policy and got higher prices and a war and they voted no. While there are a lot of positives in the Trump Administration, that can easily be undone by the next President since Congress did nothing to create laws around the gains. I expect a higher VIX next week, and a trip to close to 700 SPY. I would like to be wrong but the VIX curve is too backward to say otherwise. A cease fire in Iran would help all of that and drive SPY to 760 or higher. So far we are 0 for everything on ceasefire deals. I see a huge SPY range next week.
In that range will be opportunity. You can learn to trade it free for 30 days here.
To Your Trading Success,
Andrew