BY ANDREW GIOVINAZZI
July 9th, 2025
Yo Pit Crazies,
It’s hard to imagine a more chaotic quarter than the last three months. Things were so volatile that, at the start of the 90-day period, the VIX spiked to 60 and confusion was everywhere. Despite the turmoil, 0DTE strategies managed to thrive — you can see that here. By quarter’s end, the VIX had dropped a staggering 45 points from its peak.
A decline in the VIX after a sharp spike isn’t unusual — it typically retreats quickly following short-term surges. That said, the recent setup looked particularly primed for a ‘VIX bomb’-style volatility collapse.
Now let’s see if that happened…
VIX is heading toward lower levels after Pres Trump drew his Tariff Battlelines
This reminds me of Uhtred of Bebbanburg in The Last Kingdom series, when he boldly challenged the Viking prince to a duel in the square. Alone and outnumbered, Uhtred infiltrated the Danish camp and fought Ubba to the death. Moments later, the Saxon army arrived and secured a decisive victory.
Pres Trump wants other countries to pay duties to offset our trade balance, bring in revenue and create jobs. Whether or not this approach will be effective remains to be seen — but for now, the SPDR S&P 500 ETF (Ticker: SPY) is trading at all-time highs. Regardless of the outcome, market participants appear optimistic. Since the post-World War II era, the United States has remained a major consumer market for global exports, and that dynamic hasn’t changed much.
But the U.S. is no longer the only game in town. Regions like Asia-Pacific, the EU, China, Africa, and South America now have large and growing internal markets of their own. Unlike the U.S., most of these regions already impose tariffs — and that’s beginning to change here as well. The big question now: will Donald Trump succeed in reshaping trade policy the way Uhtred triumphed in The Last Kingdom?
Stocks are currently at all-time highs, the VIX is at a three-month low, and realized volatility in SPY has dropped to its lowest level of the year. My anticipated ‘VIX bomb’ is starting to fizzle out.
Time to bet on Uhtred winning the battle. Stocks look poised to push higher, while the VIX is likely to tumble — possibly down to 15 by week’s end, even if we see another ‘battle in the square.’
To Your Trading Success,
AG
