Hi everybody. JD here with your Rational Trader market analysis.
Let’s talk about today’s volatility spike — and how I handled a trade that started with the right thesis… but needed quick adjustments on the fly.
Volatility Refuses to Settle
Coming into the week, the VIX had been retreating steadily. After a long stretch above 20, I expected a continued fade — potentially even down to 15, which would’ve signaled full normalization post-tariff noise.
But that’s not how it played out.
Instead, we saw intraday spikes on back-to-back days — first triggered by a rough Treasury bond auction, then again today with the VIX pushing above 22 before settling back just over 20.
In short: the volatility spike was real. And I should’ve respected it more, earlier.
The Setup Was Right — But Timing Wasn’t
Today’s trade was in the Triple Qs. The macro backdrop was supportive — Congress had passed a stimulative tax bill (with expanded SALT deductions), and Bitcoin was screaming higher (risk-on behavior). All signs pointed to a rally.
And we got it — briefly.
Within the first 30 minutes, the Qs spiked and I had a solid gain. But I didn’t close the position. I thought the move would continue all day, and I set a target at 519.
That was a mistake.
The VIX spike should’ve told me to keep the trade on a tight leash — instead, I gave it too much room.
How I Recovered
After watching the position fade, I held on — waiting for a second spike. When it came mid-morning, I locked in 50 basis points and walked away.
Was it the perfect exit? No. But it was a smart one.
In this kind of environment, all bets are off when the VIX is spiking. You’re not trading a clean trend — you’re trading noise, sentiment, and risk flinches.
That’s why I say: Tight leash trading wins when volatility gets loud.
Talk soon,
JD
The Rational Trader
P.S. I’m going to be talking with Cam White on CS Live tomorrow at 11am Eastern. Click here to join me when the live room opens!
