VIX Puts in a Six Month Low

Andrew Giovinazzi

Yo Pit Crazies,

I asked my students today how much oil is flowing through the Strait of Hormuz. I got about 10 different answers.

The favorite was the USA controls the SOH but oil only comes through in dribs and drabs. I tend to think that is the case.

The conflict is not over until the USA controls the flow of oil through the SOH in my view.

However, VIX has other ideas.

30 day ATM IV hits a 6 month low.

Below is the Edge Hunter Skew-O-Later sheet and it showed a steady drop in IV ATM all day. The S&P 500 Trust ETF (SPY) only managed about .30% of a move too.

This is the kind of day Short Vol People love. No real upside move and no real downside move even with the giant catalyst of an inline CPI.

Sep 11 ATM IV in SPY

VIX made a 6 month low today. At this point, traders don’t care about the Strait anymore.

6 month VIX chart

Somehow we can stand higher oil prices and every major Gulf State is looking at a timeline to make the SOH irrelevant. That is what VIX is saying now.

Is that right? I don’t know, but an irrelevant SOH is bullish the globe in my view. Stocks are at all time highs in the USA.

We will see Zone 1 for VIX this week, the 13 handle or 13.99 or lower, post PPI. I think that will spur some more bulls in other stocks beside the Mag 7 and tech.

I go live Friday to lay it out.