This week will set the tone for August in SPY

BY ANDREW GIOVINAZZI

July 30, 2024

Yo Pit Crazies,

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Speaking of the Standard and Poor’s 500 Trust ETF (Ticker: SPY), a big junk of the market cap of that ETF will report earnings this week- META Inc (Ticker: META), Microsoft Corp (Ticker: MSFT), Amazon.com (Ticker: AMZN) and Apple Inc (Ticker: AAPL). In my opinion that will decide August for traders. Things might change after Nvidia Corp (Ticker: NVDA) earnings later this month but for now this is setting the trend.

30 Day SPY chart

For the first time this year, the week is setting up for some great trade. With the FOMC throwing a little more gas on the fire, we should see some fireworks this week.

The question is when the firecrackers will go off so we can make some dough.

We don’t normally have a great VIX short opportunity like this.

There has been one opportunity this year besides this week where broad market volatility and the FOMC with some earnings tossed in has created a witch’s brew for implied volatility and VIX.

30 day implied volatility in SPY in the red line

I expect what we have had already for Big Tech earnings. Not perfect but ok but not enough to drive stocks on a moon shot. The Fed might talk soft but mostly every FOMC has been a 10 point rally in SPY because the Fed does not have to keep raising. That leaves VIX pretty high with all the catalysts slowing down.

At this rate I expect a 14 VIX by Friday with 13s next week. We are riding that in Weekly Profit Cycles and will likely load more on Wednesday.

Look for our VXX trade opportunity coming soon from OP Research!

To Your Trading Success,