1/x Both Pres candidates confirmed that there’s no stimulus deal, and the reaction from the market? Yaaaaawn. Red Herring. As predicted in space & time we knee-jerked to the 20day in the Wed-Fri window w/a negative knee jerk on this ‘negative’ news today. & there you have it...
https://twitter.com/jam_croissant/status/1318780218346188801
2/x The market reacted well around the 20 day, & we have what looks like it‘s likely the short term bottom we’ve been looking for. As I’ve insinuated here & been more explicit w/ a number of you by DM I’ve been adding @ the 20day the last 2 days after patiently waiting for a week
3/x & am now 50% long from those levels & looking to add to these positions over the next 2 trading days. Although the window has not officially closed yet, the body of supporting evidence has grown to a point where our models have pointed to the need to proactively risk on.
4/x As I warned , IVol & skew were key. These were compressed very early on today, & quick reflex sentiment indicators (like p/c equity)& media sentiment had turned noticeably more cautiously the last 36 hrs. Most importantly tho, the clock has continued to tick. Reinforcements
5/x should soon be on their way, in the form of increased charm/vanna flows & EOM/BOM flows, assuming we make it through Fri w/out a closing violation of the 20day. The election event straddle has compressed to a surprisingly low value of $70(+/-2%), while the Dec/Jan straddles
6/x have maintained their significant post election premium, which, as mentioned, could provide gamma support w/more vanna fuel to bridge a run from Nov to the traditional chase in mid Dec... tread lightly until midday tomorrow, as there are still potential warning signs in the
7/x form of an underperforming NDX that I am closely watching. Ideally, we continue to see Vol compression throughout the day, & P/C equity & other sentiment indicators don’t quickly turn too bullish again in the morning. We are hanging near my 3453.5 level currently. A decisive
8/8 break above could squeeze us up to near our 3474.5 level, with an 👁 toward the critical resistance of 3484-88 level on Mon. Watch 3437 support on the downside for a potential overnight test of support. Good luck! 🍀
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