1/x The game of chicken continues...Everything from my TLDR 24x thread from Monday👇still applies... Although, we have managed to close above our highlighted ATH & repair the technical damage from earlier this month, the🪟of weakness officially opens after the open tomorrow.
2/x with Gary impressively over FED, the Vix at its recent floor & Vixperation upon us, that points to a continuation of the tug o war. Unless the FED decides to take the bananas away, all signs now point to a buyable correction in time &/or price w/ a closing stop at the 20 day.
3/x After the Vix print, time has come to nibble on some OTM calls for either stock replacement or hedged delta neutral for long gamma, to be added to after the fed announcement, but before Powell’s testimony. Expect some strength in the morning followed by a brief buyable dip to
4/4 be rode higher into Powell’s testimony. If it makes it to 2 std dev up of 20 day or our *** just below, that’ll be a good🪟to scalp from the short side for a pullback. Watch the NDX for leadership, p/c equity for retail overreach, & rising Fixed strike Vol for clues. GL!!🍀🍀
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@chicagosean 1/x although I mostly agree w/@OptionPit, I am going to add a little important nuance, b/c as usually the case SPX is not Always better. Other than the notional liquidity of SPX there are several other important factors/ market characteristics that people should be aware of when
@chicagosean@OptionPit 2/x deciding whether to trade SPX vs ES (SPY is an inferior product to SPX) 1)different regulatory requirements- ES is subject to CME SPAN, where as SPX is subject to OCC index risk (generally this is adv. SPX again as OCC is less strenuous -8% +6%) 2)if your portfolio of other
@chicagosean@OptionPit 3/x positions is primarily future based, you will get cross margining benefits from trading es, not SPX. If your portfolio is primarily equities you will get cross margining benefits from SPX not ES. B/c of cost of carry and liquidity benefits of ES, most quant shops hedge trade
@Garrison1Boston@DougKass@andrewrsorkin@BeckyQuick@SquawkCNBC 1/x prepandemic subpar growth was a result of deflationary pressures borne out of 40 yrs of supplyside & monetary pol driven Econ policy. ‘Productivity’ has dramatically declined as $$ has been shepherded
towards deflationary forces that have served to winnow the middle class
@Garrison1Boston@DougKass@andrewrsorkin@BeckyQuick@SquawkCNBC 2/x like globalization, tech replacement of labor, removal of labor rights, a lack of antitrust enforcement, NTM the forces of malinvestment & leverage cap structure. This has hollowed out the growth consumption engine of the US consumer and degraded the fabric of US society that
@Garrison1Boston@DougKass@andrewrsorkin@BeckyQuick@SquawkCNBC 3/x once served as a major driver for the US as a magnet for those in pursuit of the American dream... But not all is lost. I think if we continue down the same path, yes we will get the same results, but to ignore the changes in economic policy and declare it is back to business
1/x The moment of truth is upon us... As the market is prone to do, it has rallied to the most critical point & is forcing all but the most resolute 🐻 out of their positions, just as it did w/ the bulls @ the 1 stddev down of the 20 day that we highlighted several weeks ago.
2/x So, for the next couple of days, until quarterly Vixperation, we’ll likely continue to see the markets play a new game of 🐔 w/ our (several months ago called) ATH in March futures of ***3957, which we have once again rejected overnight... as mentioned last
3/x week:the tug-o-war of whether or not we are going to get the blow off top before the decline is on the verge of being decided with this level in the next several days...Be patient. We’ll know a lot more very soon. As we resolve this important inflection point.The price action
1/x I’ll keep it brief, as everything from Monday & Friday still applies👇. We called the likely move to exactly 3957. Then we were fortunate to call the pause & small pullback we’re seeing. So, here we are on a prequarterly OpEx Fri.3/12 w/ Gary 🦍happy & full of🍌 & w/👸& 🦥 w/
2/x some remaining business to take care of, as this is 1 of their busiest days of the year. As I mentioned, much like the market played 🐔 w/the critical 1 std dev down for a week, now it’s likely to play🐔 w/this critical level.The market likes to take things to these important
3/x inflection points & W/ $414 billion in stimmy checks on the way, and seasonality trending positively as we turn into the spring, the tug-o-war of whether or not we are going to get the blow off top before the decline is on the verge of being decided with this level/ this week
1/x Monday’s update was darn near perfect. So, why mess w/perfection (chef’s😘😂)? Little’s changed.We‘re still stuck in a tug-o-war.👸&🦥are almost @ full strength & w/🦍back under control in SPX’land,they make for a formidable team.Despite the market’s obvious technical break &
2/x innumerable warning signs & waning momentum, it’s going to be difficult for the🐻’s to make major headway this week. In fact, more likely than not,👸&🦥 w/ 🦍’s help will continue to have the upper hand until @ least 3/15, & likely until 3/17. ***3957 is still the big level
3/x to 👀b/w now & then for a close above to turn the tide to the upside. A close above 3903, could take us up the 🛗, to challenge that # in that 3/15-17🪟. That’d be the perfect way to keep everyone on their toes...& markets❤️to make everyone play the guessing game. After all,
1/x This market’s been in a protracted tug-o-war for 1.5 months, as we sit here playing🐔w/ the, long highlighted, 1 std dev down of the 20 day In ETH once again..This 1st occurred 1/29 w/the ‘memeltdown’. Now we’re seeing it again for the 3rd x in<2 wks. As I’ve discussed before
2/x spending this kind of time in this weak technical, during what should otherwise be a🪟of: 1)VERY bullish Vanna & Charm flows 2) Improving seasonality 3) Strong midterm momentum/trend 4)ST oversold & 5)a healthy repair of retail bullish over positioning is a ⚠️sign, speaks to
3/x how poor all the other critical structural macro flows have been...Price is truth, & momentum is seriously flagging despite other flows for the 1st time since Sept. Hence, the shift in our distributions from a ST bullish ER with 2 sided fat tails, to what appears to have a