Hey, Ross here:
We’re about to close out the quarter.
And while most traders are focused on where the S&P 500 finished Q2…
I’m more interested in what this setup could mean for Q3.
Because several major signals are now pointing in the same direction:
Volatility is about to spike.
Chart of the Day
Take a look at this first chart.
It shows J.P. Morgan’s quarterly rebalancing estimates – basically, how much equity buying or selling could come from large funds adjusting their portfolios at quarter-end.
And right now, the estimate is deeply negative.
In plain English, that means large funds may need to sell a large amount of equities as they rebalance.
This is not some emotional “bearish take.” It’s mechanical.
When big funds rebalance, they don’t care about the headlines.
They buy what they need to buy. They sell what they need to sell.
And when that selling hits near quarter-end, it can create a lot of short-term pressure…
Pressure that could start hitting as soon as tomorrow.
At the same time…
VIX call open interest relative to puts is at the highest level since July 2025.
Traders are loading up on bets that volatility will rise.
Meanwhile, margin debt is also sitting at all-time highs…
Telling us there is a lot of borrowed money in the market.
When leverage is high, moves can get amplified fast.
A small pullback can force selling.
A sharp rally can force shorts to cover.
Either way, things can move quickly.
So when you put all three together…
Quarter-end selling pressure…
Traders betting on higher volatility…
And record leverage in the system…
You have the ingredients for a much more volatile Q3.
But there’s one thing most traders miss when it comes to such volatility spikes.
I elaborate below.
Insight of the Day
Volatility spikes cut both ways.
A lot of investors hear “volatility” and immediately think “stocks falling.”
But that’s only half the story.
Volatility just means bigger moves.
Those moves can be down…
But they can also be violently higher.
Look at how the market is positioned right now.
Positioning is nowhere near euphoric.
There is still a lot of money that can come into this market.
But at the same time, speculators have been getting increasingly short equities.
That creates a very interesting setup.
You have potential buying power still sitting on the sidelines…
While a growing group of traders is betting against the market.
That’s how you get sharp moves in BOTH directions.
A bad headline can trigger a quick selloff.
But if the market holds up, those shorts can get squeezed hard.
That’s why I believe Q3 could be the perfect trader’s market.
Not a market where you blindly buy and hold everything.
Not a market where you panic at every red candle.
A market where you need to read the signals correctly…
Know where the pressure is building…
And position for the next major move before it becomes obvious.
So make sure you keep reading this newsletter…
Watching my YouTube videos…
And you’ll be well prepared for what’s to come.
Customer Story of the Day
“I’m not someone that usually leaves reviews, however, if I could give more stars I absolutely would!
I am currently enrolled in two of their courses. I knew NOTHING about the stock market when I joined back in March after seeing Ross on The Cartier Family YouTube Channel.
Ross and Jean have rather quickly taught me how to navigate the market. They are so patient with ‘newbies’ like me and have eagerly answered my questions with demonstrations.
I would highly recommend this down to earth and knowledgeable team to anyone that is on the fence about joining. Just take the leap and watch your wallet grow!”
Ross Givens
Editor, Stock Surge Daily
