Five specific early warning charts — MOVE, VVIX, Yen, Yield Curve, and VIX Term Structure — are giving an overall picture of where volatility sits in the market today.
And each one is telling us the same thing – volatility isn’t fading away any time soon.
Right now, the short end of the yield curve remains under pressure. Rate expectations are shifting. Treasury flows are unstable.
And until front-end yields begin to settle and reverse, equity markets will struggle to find durable footing.
On the surface, things look calm.
The MOVE Index — bond volatility — is hovering near multi-year lows. After January’s swings, markets have slipped into a period of relative quiet – even as volatility bubbles up underneath the surface.
But underneath that calm, structural pressure is building.
Countries like China, India, and Brazil continue reducing U.S. Treasury exposure. The broader BRICS shift away from dollar-denominated assets is ongoing.
At the same time, the yen carry trade is under strain as the currency strengthens — a dynamic that historically tightens global liquidity. [Learn more about how the yen carry trade is affecting the broader market right here.]
The last time the yen moved this quickly, global markets repriced fast.
What do all these factors tell us? It’s simple.
Stabilization in equities won’t come from headlines. That signal will come from the bond market.
If the stock market is going to stabilize, the front end of the bond market has to turn first.
That’s what we’re watching.
Until the markets balance out, volatility remains underpriced. Luckily for us, that’s that’s exactly where we live here at Masters in Trading.
When volatility is inexpensive across both bonds and equities, you don’t need to predict direction.
You can let the markets come to you with trades that can pop whatever direction the market breaks out.
So join me for today’s episode of Masters in Trading LIVE at 11AM EST. I’ll show you where each of our five early warning charts — MOVE, VVIX, Yen, Yield Curve, and VIX Term Structure — sits right now as volatility threatens to break out. And I’ll detail the key sectors I’m watching that hand us opportunities to trade on cheap volatility.
P.S. Are you interested in taking the next step toward options mastery?The Masters in Trading Options Challenge is right here to help you in your journey.
The Challenge is where we take everything you’ve learned in my daily LIVEs — fixed risk, thesis-driven exits, laddered entries, defined-duration trades, and emotional discipline — and put it into practice in a structured, step-by-step environment.
For two weeks, we walk through the foundations of real options trading the way I learned them on the trading floor. You’ll learn exactly how I think, exactly how I build trades, and exactly how I manage both the winners and the losers.
Just click here to check out what the Masters in Trading Options Challenge has in store for you.
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Be sure to join me live on YouTube and ask me anything. It’s a great way to connect directly with our trading community and make sure you’re getting the insights you need to help build a deeper understanding of the markets.
Remember, the creative trader wins,
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| Jonathan Rose
Founder, Masters in Trading
 | Who is Jonathan Rose? | In 1997, Jonathan got his start as a floor trader at the Chicago Mercantile Exchange. He traded futures on the Nasdaq and S&P 500 during the dot-com boom and bust. In 2003, he became Director of Trading at a leading proprietary trading firm. His job was to manage the risk for the entire firm… with dozens of traders under his supervision. In 2010, the firm sold to a billion-dollar hedge fund. And Jonathan took a career break to train for the Wisconsin Ironman. After completing the 140-mile triathlon, in 2011, he took his trading career in a new direction. He became a market maker at the world’s largest at the Chicago Board Options Exchange. It’s the world's largest and most influential options exchange. But it wasn’t until 2015 that he found his true passion – teaching regular folks how to trade like the pros at Masters in Trading. Since then, he’s trained more than 100 professional traders and helped thousands of folks learn to trade options like pros. These folks not only get to learn the ropes with Jonathan. They can also follow his trade recommendations in real time. To learn more about joining Jonathan’s thriving community, and becoming the best trader you can be, visit here.
 | 90-Day Trade Hall of Fame | | Albemarle Corp. | Advanced Notice | 959% | 31 days | | iShares Ethereum Trust ETF | Advanced Notice | 275% | 26 days | | Alphatec Holdings Inc | Earnings Advantage | 213% | 18 days | | Lyft Inc | Advanced Notice | 209% | 13 days | | Canadian Solar Inc | Divergence Trader | 124% | 9 days | Note: These trades represent previously closed positions. | |
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