1/x so here we are after 2 weeks of a 🐌’s pace, correction in ⏰. The🪟is closing & our🐌is now primed for liftoff. As I explained last Sun night, the markets had every reason to decline in this🪟already. But it hasn’t even played🐔. Despite a long list of reasons to be🐻’ish,
2/x including: 1)Vanna👸&Charm🦥 away @ the 🏖 for an extended vacay, 2) sentiment/positioning historically stretched by almost every metric, 3) a VVIX/VIX ratio blinking🚨, 4)earnings season after a massive run calling for what should be some natural profit taking 5)an imminent
3/x Tax season & 1 year anniversary of longs also calling for profit taking selling flows, 6)seasonality waning as we head towards May 7)& most importantly, a Fed that’s more likely than expected to begin walking back its ultra loose rhetoric, as we continue to see upside
4/x surprises in NFP, earnings, & a dramatic acceleration in vaccination+a reopening of the domestic economy. But despite all of these, the SPX hardly ventured anything.Instead the play was, as we suggested last week, dispersion. Our hedges in RTY &NDX doomsday names versus short
5/x downside IVol in SPX crushed it. as did our recommended calendars, w/ a new floor @ 16 VIX in SPX IVol & cheap event Vol for 4/28-4/30 also killing it. Now comes the moment of truth. Will the market finally try & shake all the bulls & test the 20 day for its long awaited game
6/x of🐔right as the🪟closes on 4/28-4/30? Or will it continue to see the writing on the wall and attempt to front run the outcome altogether out of the shoot 1st thing on Mon morning as bull markets are prone to do? Either way, as we’ve said repeatedly for weeks.⏰ is NOT a 🐻’s
7/x friend, & @ this point it pays to look to BTD w/ a closing🛑below the 20 day. Especially, w/the 20 day rising to our well trodden 4120 area support by Fed day & Gary🦍still over supplied & Vanna on her way back late 4/30, the odds say a buy signal is likely coming either way
8/x the #1 scenario that gives me the most pause, is a front-run rally that climbs so fast through the Fed meeting, that we get a potential Ivol increase & whipsaw w/overreaches in sentiment that drive Instability, while we are still in the🪟. So, as much as we are still rooting
9/x for a Last minute break of the 20 day...Price is truth. & Gary🦍has been absolutely in Oscar form as he has single handedly led The Wheel of Fortune cast to some of its best ratings in years without Vanna or Charm for weeks. More than ever this is a week to own vertical call
10/10 spreads for long gamma w/ short strikes struck around 4250. Watch rates, be my friends. 4226-4240 *** feels like a 🧲 @ this point by 4/30. Assuming we make it out of the 🪟 unscathed, the coast should be clear again for New ATH & premia melt until 5/19 Good luck!!🍀
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