VIX makes a 30 day low close

BY ANDREW GIOVINAZZI

March 21, 2024

Yo Pit Crazies,

Trading Desk should have a peach of a trade as SPX closes on a 100 point gap from the 11 am show time yesterday. Learn how to trade strangles and straddles in the Trading Desk.

We, as in Mark and I, expected a bit bigger for a move today post FOMC with Jpow really not doing much different. Rates are staying where they are although they might cut, no one believes that with inflation and jobs where they are.

What the news did do is crush the VIX and volatility in general. 30 day lows are 30 day lows.

30 day VIX chart with 1 min candles

That sets up some interesting trades going forward as the S&P 500 grabs some uncharted territory.

Let’s see what we got

Lean long and keep going

The lower VIX goes, the more certain people are of the rally and trends in general. We would now need some serious bad news to upset the apple cart. Micron Technologies Inc (Ticker: MU) just announced a great quarter and outlook so the Semiconductor rally is going to spill to other stocks. Intel Corp (Ticker: INTC) just got 5 billion to build more fabs.

The bigger tell is the VIX curve is getting back to normalcy and that means VIX and vol products start to decay again. This is great for the Trading Desk and Weekly Profit Cycles. The steeper the curve the more money we can harvest from future decay and buy other options. This next couple of weeks are light news wise.

Vol puts at the 13 handle in VIX could actually pay this cycle with 13 so close already. Semis have not made new highs in weeks with SPX making news highs yesterday. It will be something when more stocks participate. I think we close at fresh highs in SPX by Friday and I will close another round of calls in SPX and the SPDR S&P 500 Trust (Ticker: SPY).

Rally ho!

If you want to learn how to use the VIX cycle to improve your trading, try the Trading Desk or Weekly Profit Cycles.

To Your Trading Success,

-AG