Thread by @options_insight

0/ While the market remains headline sensitive to geopolitical news. Rate hikes and OPEX are likely to be the driver of price action this week.
Get prepared with our first 🧵of the week 👇

1/ SPX broke 4280 support last week and has reset it's range lower to 4150/4325. We see strong support at 4050 which is achievable if Powell delivers a hawkish message to already nervous markets. Otherwise squeeze risk is high on any positive headlines from Russia.

2/ VIX was floored around 29 last week as markets remained in short gamma territory and intraday vol was around 2.5% per day (14d ATR). There may be some vol reset post FOMC that can help fuel some buying as vols drift lower and delta charm brings futures buyers.

3/ We saw some puts being monetised in QQQ on @spotgamma HIRO indicator today which likely helped to stabilise things just below the PUT WALL. Short term hedgers need to be quick to monetise hedges before they burn away on either a bounce or stabilisation.

4/ Most US sectors in the red last week as broader indices were weak. Financials had a small bounce on higher yields, energy and miners pulled back with commodities and defensives such as healthcare and utilities outperformed slightly.

5/ Central banks dominate this week:

WEDNESDAY: FOMC expected to hike 25bps
THURSDAY: BOE expected to hike 25bps
FRIDAY: BOJ expected to do nothing.

Dot plots, inflation projections and forward guidance will be closely watched for clues on speed of future tightening.

6/ Hard to see how the FED doesn't talk tough on inflation when we could see 9% inflation print next month

https://twitter.com/biancoresearch/status/1502772073420279811?s=20&t=oUgtHzaL1azJ6ojfZEXakg

7/ European markets has a decent bounce last week relative to US and EM, as Russian/Ukraine talks offered some hopes of diplomatic solution. I think it was more a function of extreme short positioning, we had mentioned SX5E/SPX vol spread at 25! back to 10 now.

8/ Finally, China melting 10% per day is getting a little disconcerting. Nice thread on what is going on there

https://twitter.com/RChoongWilkins/status/1503361316253155329?s=20&t=C-65ZK7d7qCaB8Yrdp_JgA

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