Yo Pit Crazies,
Before today’s Vol-Man…
Happy Labor Day!
I hope your weekend’s treated you well so far.
AG's alter-ego Vol Man here with my weekly analysis.
Now with that out of the way…
As usual, I start with my last forecast…
Last Week’s Big Call
I’m thinking of $775 SPY for a market going nowhere next week. Iran is still getting squeezed but the Strait of Hormuz is still a problem. I’m still looking for the SOH getting open to all oil traffic at the end of the conflict and it isn’t happening yet.
Right now the average is 20 ships from the previous 100 ships. It’s getting looser but still needs full traffic.
There are no new earnings coming out to light equity fires. The Anthropic IPO is slated for September with the stock trading in October.
This is the week for a 13 VIX.
SPY got to $774 and VIX broke 14 for a brief moment in time.
I was wrong about earnings and Dell Computer (DELL), a stock I own.
I bought shares below $100 last year in the Liberation Day tumult.
I’ve sold most at good prices. It’s crazy that DELL can 5x, but that’s what’s keepin’ folks in the market.
AI spending is crazy.
The Weekly Wrap Up
The two biggest movers of the week were oil prices and interest rates. And both did a 180 degree turn midweek.
Goldman Sachs (GSCO) reported Strait of Hormuz (SOH) traffic is up to 80% of pre-conflict levels and GSCO is not one to venture into hyperbole, unless of course, it’s the pre-IPO value of a stock.
Next up Fed Gov Waller went old school and said, ‘We don’t need no stinking rate hikes’.
That was all stocks had to hear.
The jobs numbers were good and surprised everyone except the people building data centers.
Mini Rant
President Trump suggested the Federal Government should get out of the welfare business since spending on it is up 100% since 2019.
It’s the smartest thing he has said all week.
Then he killed the Friday rally and said we should tariff all countries with a trade surplus with us unless the Fed cuts interest rates.
Not his best way to pay the interest charges but not surprising.
The best thing to do is get the US Gov out of giving away money to able bodied citizens (and non-citizens).
(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 Sep, Oct, Nov
SPY was ready for a 30 day high until the President went tariff again and the scar tissue came back for traders.
Sigma vol collapsed to 30 day lows anyway and is meaningful since SPY was not at a high. That generally means we start working for a lower volatility base.
More on that later.
SPY Realized Volatility snap on Sep 042026
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. When HV10 is under 10, stocks are not going anywhere.
Realized volatility is now under 12% for the last 30 days and under 8 for the last 20. Giant, profitable companies might have something to do with that. Low realized volatility is how VIX gets lower even if the media does not think so.
VIX Volatility Curves
Closing VIX cash and curve Aug 28
Closing Curve Sep 04
The VIX curve is in contango with near the same VIX that 14 VIX as a floor with the Iran Conflict reheating and the interest rate picture somewhat fluid. The Oct contract is 18 which for all you seasonality folks will feel quite low.
(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 We lived here
VIX ZONE 3 18-23.99
VIX ZONE 4 24+
VIX kept slowly dropping in Zone 2 and never stopped. The Sep VIX future is down .60 in a week and a lot of air came out of Oct.
The fact we cannot get out of Zone 2 in 4 weeks is generally bullish SPY.
VIX 30-day chart with one-minute candles
VIX closed near the lows of the week despite Pres Trump’s comments. There is an actual contraction now in upside volatility too helping VIX relax.
The Big Call
The big events of the coming week are inflation and the start of the Anthropic IPO hype. It was plain this week that Pres Trump is not going to deal with Iran now that the USN is near in control of it.
GSCO is paid big bucks to get that stuff right. VIX likely hovers 14 for the week until the inflation number comes out. It will likely be in line as some of the cuts in spending in January will help.
Post inflation number stocks should make an all time high.
To Your Trading Success,
Andrew