📉Volatility Brief: Week of July 7, 2025 & Next Moves

Looking Back: Surface Calm, Compressed Risk

• VIX faded toward multi-month lows: Closed at 17.79 (July 7), 17.41 (July 8), and drifted even lower (16.81), signaling investor complacency and cheap hedging. (VIX trend)
• US equities notched new highs: S&P 500 surges, led by AI/tech names and strong Q2 pre-announcements. Despite new US tariff threats (notably 50% on Brazil copper), markets mostly shrugged off the news. (Tariff coverage)
• Volatility ETFs (VXX/UVXY) & VVIX cooled: After a wild spring, these products settled as realized and implied volatility compressed. Option sellers stayed active, but technical analytics warn the “coiling” phase can break fast. (Volatility ETF review)
• Market fixated on AI & Fed rate cut talk: Investors poured money into AI/tech stocks, while dovish Fed minutes reinforced risk appetite—even as some macro uncertainty lingers under the surface.
• Early earnings beat (Delta) set the tone: US banks, airlines report in mid-July; tech mega caps up next as Q2 S&P 500 earnings ramp up. Surprises here remain a potential volatility trigger. (Earnings Calendar)

Looking Forward: Thin Ice in Summer?

• Volatility is cheap—but beware the “compressed spring”: With VIX, VVIX, VXX, and UVXY all near recent lows, option protection is inexpensive. All it will take is one headline surprise for volatility to snap back hard.
• Tariffs & policy shifts remain wildcards: US-China/Brazil/EM trade rhetoric could still inject sudden fear if investors reprice risk. July-August has a history of surprise reversals during low volume.
• Q2 earnings to dominate next weeks: Watch for megacap tech, financials, and consumer names. If growth or guidance disappoints, volatility products could ignite quickly.
• Fed & economic prints: Inflation, jobs, and GDP releases can swiftly flip the story. Street is pricing for Fed cuts, but sticky data could challenge the doves.
• Tactical note: Calm markets are most fragile—now is when professional traders start building hedges, not chasing them after volatility spikes!

Key Sources

• VIX Chart/History
• Volatility ETF Trends
• Macro/Tariff Coverage
• S&P 500 Earnings Calendar
• Weekly Market Outlook

Trader Tip: Calm isn’t a forecast; it’s an environment. If you’re making money, pay for a hedge while it’s cheap—because thin summer markets and headline risk don’t offer second chances.

• Author
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Tony

I have been trading options since 2010 and have been testing and experimenting with various trading styles. Fundamental Analysis based, Technical Analysis based, Trend Following, Day Trading, Swing Trading, etc.

My primary option trading strategies incorporate volatility and I am constantly experimenting with various trading strategies to improve my PNL.

I hold two Master’s degrees (MSc and MBA) with career experience as a cancer research scientist and a digital marketer.

Latest posts by Tony (see all)

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• 📉Volatility Brief: Week of July 7, 2025 & Next Moves - July 11, 2025