1/x per usual, Wed’s update’ll be brief...Vanna’s👸gone. But Gary’s🦍@ the top of his game. & although our🦥is no👸, he’s charming enough when Gary’s well FED, & so, as predicted, here we are @ our projected 4140@ our long projected🪟, & WofFortune is crushing the ratings... But
2/x remember it’s never an easy ride. we’re likely to get some more mowing of the🌷’s & signs of accelerated forced call squeezes across the space before it’s all said & done... If this call squeeze isn’t able to drop kick the🍌🍌 out of Gary’s grasp in the next 1.5 weeks, it’ll
3/x be hard to loosen the grip & turn the tide. Regardless, @ this juncture, gamma is simply too cheap in this🪟& as stated, now that we have hit our objective, it’s time to START accumulating on the upside, gradually replacing stock w/calls or building a delta neutral, short
4/x stock/long OTM call position. Despite the vanna/Charm, Vol targeting, trend following, & risk parity flows that continúe to drive this impulsive leg higher, as Ivols decline, these ‘short gamma’ strategies all represent potential energy for selling into a decline should Ivols
5/x reverse course into a rally. Soooo, Fixed strike IVol is the thing too 👀 like a 🦅... This is particularly true in the NDX. Watch Rates like a 🦅. Watch IWM & NDX for underperformance. That’s is where we’ll be proactively adding convex hedges opportunistically. If a decline
6/x finally comes mid/late next week, be careful buying the initial dip, as seasonality continues to weaken as we approach May & demand flows are waning w/ low short interest @ record low levels, & decreased retail BTD’ers around to cushion the blow. Pair this all w/the potential
7/7 energy of compressed IVOl & skew, & the tail’s likely fatter than its been in a while w/an increasingly neg dist as well. If we can make it through 4/26 w/out a close below 20 day, we’ll know that the strength is there for the rally to continue until tax time in May. Gluck!🍀
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1/x Here we are @ 4/12. The rally to ATH has transpired as predicted & the VIX has tumbled to 13 month lows. The🪟of weakness has opened & this is where things start to get weird...it’s NEVER straightforward, & imagining how this market will manage to tumble through the🪟begins
2/x to become fairly hard to pinpoint. The truth is, that despite Vanna’s👸part time sched this week & charm’s🦥fading strength as the week goes on, Gary’s still very much in control until the🍌’s get taken away. Any rally to our 4140 *** objective should begin the process
3/x of loosening his grip...& any rally above 4140 toward a 420 spy before 4/20 should only serve to create greater potential energy for a correction in the month to come. Skew in the indices has been shockingly soft given how low IVol has become, NTM particularly in the front of
1/x As we approach our long awaited🪟. It’s important to remember it’s NEVER an Easy Ride...Everything from the last 2 posts this week👇still applies, BUT...The strength of the NDX, the hugging & stretching of the 2 stdev of the 20 day, in the face of 46k lbs of JuneQ 4115 🍌’s
2/x from last week, the overextended retail sentiment & RSI’s, tells us the rally is hungry for more. We still expect the market to squeeze to ~3140 by Mon 4/12. @ 3140 is where things get interesting. w/the🪟open, this is where the market will begin to play🐔to shake the fragile
3/x paper hands & squeeze the last remaining 🌷‘s... So many are looking for this 3140 area to be a potential🔝, that my SPY-dey sense tells me we’ll potentially get a unimaginable stretch to a well deserved 420 SPY sometime before 4/20. My current est sees a potential 🎯
1/x Everything from Monday’s 🥐 Crumbs👇still applies, So I’ll keep this short & jammy...The speed of the rally has been telling. Despite bullish sentiment, a rally beyond the 2stdev up of the 20 day, continued bear steepening, NDX beta adjusted weakness, 🚨RSI’s, this market has
2/x barely flinched... that tells me this market has more work to do on the upside still. This correction in time tells me that the rally was just a little ahead of schedule, but it seems unlikely that the market is going to let all of those late to the party enough time to catch
3/x up to the tour bus. ***4140 sits overhead & Vanna👸& charm 🦥 are slated to host an epic late Friday/Early Monday special edition of the Wheel of Fortune. Gary has gorged himself on🍌& is unlikely to be hungry until at least next week. Sky high ratings could distract
1/x As is usually the case with most long weekends, but especially so w/The Easter Bunny, IVol got the living daylights beat out of it... it didn’t help that Gary was already well FED coming into EOQ & got a dump trunk full of 🍌’s from the Zookeepers @ JPMorgan in the form of
2/x the 46k SPX JuneQ 4115 Calls mentioned last week... Dealers are stuck & Gary’s as fat as I’ve seen him in over a year. So it is, despite a 72 hr 80 PT SPX rally, no surprise that we are stuck here at 2 stdev up on the 20 day, playing 🐔w/ our long 🎯4024*** w/ a 1 week SPX
3/x straddle trading only $48. 4042.25 *** sits closely overhead as well. & despite every flow reason to hope for more upside & every macro reason to hope for mean reversion, w/👸Vanna & 🦥Charm well rested, this market sits between a 🪨 & an immovable force until 4/12.But don’t
1/x it’s synthetic Friday... I’ll keep it short and sweet. Everything from Tuesday still applies👇. Vanna’s 👸back, & Gary 🦍is as well FED as ever. There was a massive quarterly rolled trade, JuneQ 3175-3760 ps vs 4115 C 45,600x that traded in SPX today that only reinforced this
2/x despite all the drama & headlines, stay the course, & expect more digestion w/an upward bias. To be clear, normally, given +seasonality, the reopening & the technical strength of the last week, we’d normally expect much higher prices, but 1)momentum has been waning 2) the 🐻
3/x steepening of the yield curve continues to scream, now having reached the > the 2/10 spread has seen since 6/2015 3) the DXY is 🆙 1.2% in a week 4) There has been little to no retail call buying response to the new stimmy tendies due to the reopening (as predicted)...but now
1/x Despite an overwhelming number of fundamental reasons to be 🐻’ish, the 1-2 punch 🥊of 1)a well FED Gary & 2) an increasingly more involved Charm🦥, should continue to support the market until late 3/31st when Vanna should return, fresh from vacay & throwing haymakers...So,
2/x despite all the drama & headlines, stay the course, & expect more digestion... To be clear, normally, given +seasonality, the reopening & the technical strength of the last week, we would normally expect significantly higher prices, but 1)momentum has been waning 2)the NDX
3/x leadership hasn’t been able to regain any semblance of strength 3) the 🐻 steepening of the yield curve continues to scream, now having reached the > the 2/10 spread has seen since 6/2015 4) the DXY is 🆙 1.2% in a week 5) we are staring $136 bill in neg equity flows from