BY ANDREW GIOVINAZZI
July 3rd, 2025
Yo Pit Crazies,
One thing remains clear: stocks still have strong upward momentum. The S&P 500 is surging past 6250 with remarkable strength, and investors who stayed on the sidelines may find it difficult to catch up. The Non-Farm Payrolls (NFP) report came in well above expectations, which likely reinforces the case for Chairman Powell to keep interest rates steady for now.
Right now, investors aren’t concerned about the BBB. I expected the market to drop after the Senate’s revisions to the bill, but stocks held firm. So with equities at highs, the job market strong, and little reaction to the BBB, the question is—why is the VIX still sitting at 16.46?
Let’s find out…
July 9th is the next Big Date
When a major event is on the horizon—such as the upcoming European tariff decision—options markets tend to freeze, and at-the-money options may appear to gain value. Despite time getting closer to expiration, traders resist options decay. That’s exactly the environment we’re in now. The VIX futures curve is sharply elevated, with the July contract trading nearly $2.00 above VIX spot. This creates attractive opportunities to buy relatively inexpensive VIX puts for July and August.
VIX Futures curve, Jul 03, 2025
There is plenty of action in stocks as Hans’ AI adjacent portfolio will attest. He went live this morning to discuss market happenings and updates on his MTI tracker (hint: we’re seeing more green than we have in the past month). You can watch the full replay here.
I still believe there’s a strong chance of a sharp drop in the VIX once we move past the 9th. We could see it hit 14 by the end of next week.
To Your Trading Success,
AG
