Yo Pit Crazies,

AG's alter-ego Vol Man here with my weekly analysis. As usual, I start with my last forecast.

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Last Week’s Big call for Mar 20

 

The big question here is the Trump Adm keeping folks guessing. What is the mission and what will it accomplish? Right now it looks like payback for 50 years of sponsoring terrorism in the Middle East for Iran. My guess is a seizure of oil assets would mean Iran has lost power to inflict damage any more since they will shortly run out of money. That still means VIX will keep winding up slowly in fits and starts and SPY likely makes a new low until this happens. Trump is signalling via Twitter the USA mission is winding down but that could leave Israel free reign to inflict damage since the USA and Israel are using slower moving attack aircraft now that they control the Iran airspace.. The more questions I have here, VIX is likely higher and SPY lower.

The Weekly Wrap Up

Well, well VIX is higher and SPY is lower. To be honest that was not too hard of a pull with traders actually selling stocks this week. This time, Big Tech helped more than anything after some court rulings and AI related layoffs and worries about the big tech SAAS killer. Those are real growth issues and stock mark downs that the Iran Conflict will change. When a software company goes from 40x earnings to 20x earnings only time and revenue will bring it back.

 

I want to revisit the US Oil Trust (Ticker: USO) because this is where the story gets worse or better. Right now oil prices are still going up because the Strait of Hormuz is blocked. Oil prices will keep going up until the SOH is open. That is the tweet.

 

USO Chart for the last 3 months

 

Credit Risks in big Private Equity are not helping either. My Sibyl scanner is picking up a lot of Blue Chip PE companies near 52 week lows. It has been years since I have seen that. Some of these firms have been in business for nearly 50 years and I would think they can manage a downturn.

Mini Rant

The MSM talks and basically puts out unsubstantiated rumors. There is very little news actual coming out of the Persian Gulf right now. Google “President Trump Feb 28th Iran Conflict Speech” and from what i can see we are following that playbook, whatever comes next. Securing the SOH is next, however that goes down.

 

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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 3 month low and now faces multiple challenges. The easy direction is down in the short term, even if we jump in fits and starts. Tight oil supplies are going to be very tough in the short term until that production starts flowing again. I don’t see SPY regaining anything until the SOH is open.

Sigma volatility ended the week at 30-day highs. A new peak means traders are very uncertain and also with SPY down 8%, the vicious rally potential keeps stock prices higher.

SPX Realized Volatility snap on Mar 27, 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 as traders no longer can discount an early win. There are so many headwinds in front of stocks that I expect realized volatility to increase next week as the issues compound.

VIX Volatility Curves

Closing VIX cash and curve Mar27

 

Closing Curve Mar 20

The VIX curve is in full backwardation. All the short term VIX futures are higher than the long term VIX futures. That means traders expect VIX to jump in the short term or at least keep the move going higher.

Same curve but everything is shifted higher in backwardation. The market is looking for SPY to move like crazy next week and I agree with that. We are 4 weeks into this activity now. General backwardation has lasted as long as 60 days in the Euro Crisis and GFC.

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OP VIX Zone Watch

 

VIX ZONE 1 9-13

VIX ZONE 2 13.01-17.99

VIX ZONE 3 18-23.99 We touched here

VIX ZONE 4 24+ ← We lived here

 

VIX started the week in Zone 3 for a moment when the peace overtures hit the tape. Since then the extension for bombing power plants, etc is now out to Apr 6th. It would surprise me if we dropped out of Zone 4 next week without any real progress.

VIX 30-day chart with one-minute candles

 

VIX is close to highs for the 30 day period as the conflict will continue at least until the Apr 6th date.

The Big Call

The Iran Conflict keeps going. Progress in the USA keeps going even if Tech Investors are bailing on high value names. I expect more of the stairstep down with SPY touching 630s and VIX jumping into the low 30’s. Much like this week, it will be a daily grind down. I think an exception would be the Marines securing the Strait of Hormuz. At that point things would turn around in a hurry.

 

To Your Trading Success,

Andrew