BY ANDREW GIOVINAZZI
June 16th, 2025
Yo Pit Crazies,
Today, I asked my subscribers about the war in the 1960s when Israel faced off against several Arab nations simultaneously. Was it 6 days or 7 days? Back then, Israel confronted Egypt, Jordan, and Syria—supported by other regional powers—striking swiftly, including air raids on tank columns moving along those old 1960s highways. The conflict ended almost as soon as it began, but its aftermath triggered years of geopolitical instability, including the oil embargo that dealt a heavy blow to the American economy.
This action by Iran appears to be over before it truly begins, as Israel demonstrates its ability to project power deep into Iranian territory. The message is unmistakable: a nuclear-armed Iran is unacceptable. However, such military strikes across the Middle East leave a bitter aftertaste for investors. Traders, as always, leave behind a clear fingerprint in the markets with every move they make.
The impact of those actions still lingers in the market’s memory.
The SPDR S&P 500 Trust ETF (Ticker: SPY) is back to Wednesday’s levels but VIX is not
As you can see below, SPY has largely recovered the ground it lost on Friday. There were unconfirmed rumors that Iran was seeking peace, but as of this writing, nothing has been verified. Still, the market reaction was strong enough to push SPY close to the $605 level.
10 day SPY chart
On the other hand, the VIX hasn’t returned to its lows from Wednesday. This suggests traders still expect a wide trading range for SPY and are positioning for further movement. In my view, that move is likely toward the $610 level this week.
VIX 10 day chart
The FOMC meeting on Wednesday is poorly timed for VIX traders, as it falls right on June expiration. With roughly half of last week’s VIX spike still intact, there’s a strong chance that volatility could fade significantly by Friday.
Equities are signaling a clear outcome, but ongoing tensions between Iran and Israel are keeping the VIX elevated. I expect the July VIX contract to get crushed by week’s end.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
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