Yo Pit Crazies,
AG's alter-ego Vol Man here with my weekly analysis. As usual, I start with my last forecast.
If my Option Volatility Jargon is vexing, tap our Glossary here.
Last Week’s Big call for Apr 10
The Iran Conflict keeps going. I expect at least one trip down to 640 or lower next week as the conflict will likely intensify as Pres Trump tries to get Iran to the table. Any deal to open the SOH, and SPY is 665 -670 in a heartbeat with VIX to 21 or lower.
The Weekly Wrap Up
Well, we did not get a deal but we did get a cease fire. Heck stocks ran to 670 and added another 10 points or so in SPY. VIX dumped to the 19 handle so my prognostication was pretty good. Early in the week, stocks were stable waiting for Iran to come to the table after getting a crazy “civilization destruction” tweet from President Trump. Well it worked, at least for now.
US Oil Trust (Ticker: USO) had a bad day on Wednesday. Since the drop, Oil mostly has fought back since there is still no permanent solution to the Strait of Hormuz. Currently, Iran is not making friends shutting down transit in the Strait. Oil is still down from highs as some ships are moving trying to get back to normal.
USO Chart for the last 30 days
The Fed spoke this week, released minutes and inflation is back on the rise in March. No surprise with oil prices spiking. AI is crushing software companies again as many of those stocks trade at 52 week lows. Amazon (AMZN) is one tech bright spot as it moves into making chips. As far as tech goes, chips good, software bad still until further notice.
Mini Rant
Lack of local governance is ruining the country. The State of Maine just passed a new income tax, giving voters a stimmy check, re-routing fraudulent payments and a whole host of fiscally unsustainable policies. When will this craziness end? In the meantime, the Federal Labor Force is down over 300k for the year. Is anyone noticing? Apparently the WH has knocked off 600 billion of the deficit spending but is not getting help from anyone else in government.
My Sibyl scanner is picking up a bunch of stocks making 52 week lows that could be poised for a bounce. Check that out.
(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 Apr, May, Jun
SPY closed at a 30 day high after making a 3 month low the previous week. This whole market is how the Iran Conflict comes out and right now traders are looking for a good outcome. The peace dividend is still in play.
Sigma volatility collapsed to 30 day lows. Last week was looking good but this week traders killed volatility.
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SPX Realized Volatility snap on Apr 10, 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.
SPY realized volatility jumped big on the 2.5% day on Wednesday. 2.5% is a 40% volatility move. However, VIX now is well below the 10 day volatility SO traders believe we should see less volatility in the near term.
VIX Volatility Curves
Closing VIX cash and curve Apr 10
Closing Curve Apr02
The VIX curve is in contango with a higher VIX base. This means traders expect less volatility in the very short term.
This curve was radically different from last week and is a sign traders now expect a speedy outcome in the Iran Conflict. There is still plenty of room for movement with VIX trading 20 right. That is still 1.25% per day or around $10 SPY.
Check out Volatility 101 basics on our Option Pit YouTube channel, now streaming.
OP VIX Zone Watch
VIX ZONE 1 9-13
VIX ZONE 2 13.01-17.99
VIX ZONE 3 18-23.99 We closed here
VIX ZONE 4 24+ ← We lived here
VIX started the week in Zone 4 waiting for the results of the Trump Tweets. Then we got a cease fire. VIX dropped out of the upper quartile of volatility to the 3rd rung.
VIX 30-day chart with one-minute candles
VIX basically collapsed. While we are still at 20, this is the lowest volatility of the Iran Conflict and a big nod to this situation getting under control.
The Big Call
The Iran Conflict keeps going but is somewhat in control at least the VIX thinks so. It is by no means done as the players figure out how to keep the Strait of Hormuz open. Big Bank earnings are next week but will have to be great to move the needle. I would expect some backsliding on the ceasefire and SPY touches 670 again. VIX likely does not go lower than 19.
To Your Trading Success,
Andrew