The market will have to rally without this

BY ANDREW GIOVINAZZI

February 6, 2025

Yo Pit Crazies,

There are some interesting things going on right now. Many of them center around Washington DC and to a lesser extent the markets. Here is a list of my observations of the last 3 days:

We might have Mar-a- Gaza

DOGE might find $1 trillion in waste in a week and Congress is complaining that DOGE is doing their job

Bond prices have stabilized

Mega Tech earnings were meh

Stocks are 1% from all time highs

Tariffs have fallen off the radar

The beginning of the week looked downright awful. VIX jumped to 20+ for the week and sold off for the next 3 days. People reading social media might be losing their minds. The madness! A good time for a clear head in this madness.

VIX 30 Day chart

Now did I say that stocks were 1% from all time highs? Did you miss that in there?

What is more important is how we are getting there. Read this to figure out what to do next.

SPX is making highs without the Mag 7

Much like Claude Raines in Casablanca, I am shocked that the USGOV is wasting more money than we can count except now they are counting it. Bond prices have steadily risen as rates drop and that is happening because someone is finally taking spending seriously. The sad part will be when we find out how much money the USGOV has wasted.

The Mag 7 made gobs of money but that did not help their stock prices. Only Meta Inc (Ticker: META) managed new highs as the other 6 are well off theirs. META pivoted faster than a cat on a hot tin roof as Zuck saw the writing on the wall. He can change his mind fast if he thinks it is better for META and that stock is going up. I can get wrapped up in the noise or I can see stocks going up. Ultimately price is the best signal. 9 DAY VIX dropping is the best signal.

This makes a good bullish case for SPX and a rare case of bond prices and stock prices moving in the same direction for the right reasons. 6200 SPX this week is for sure in the cards which would be what pundits don’t expect.

Keep on D.O.G.Eing.

To Your Trading Success,