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Menthor Q Profile picture
@MenthorQpro
Mar 18, 2022 • 3 tweets • 1 min read • Read on X
1/ Commodity trading houses have had to manage liquidity at current price by re-entering the market and upsizing their facilities. They are obviously under pressure and the bond market is repricing. Here you have the CDS of Louis Dreyfus, a trading house active in the agri space. Image
2/ The yield of Gunvor bond due in ‘26 went up to 16.8%, while Trafigura is close to 10%. Traf has been in talks with KKR and Blackstone to raise equity Image
3/ After ‘08 trading houses took the role that the bank used to have. JPM, J Aron (GS), MS used to trade heavy volumes of physical until regulators clipped their wings. Their role is pretty important throughout the supply chain, a blow up in this market would be a problem

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More from @MenthorQpro

Menthor Q Profile picture
Mar 11
1/ $SPX continues to trade in a zone where options positioning may heavily influence short-term moves.

This Net GEX map helps highlight where the market may encounter friction above or acceleration below. Image
2/ SPX is currently around 6782, sitting just above a region where negative gamma starts to build.

When price moves into negative gamma areas, markets can become more reactive, because dealer hedging tends to amplify moves rather than smooth them.
3/ Above the market, there’s still a noticeable positive gamma cluster between ~7000 and 7100.

Those areas often behave like speed bumps for rallies, where hedging flows can slow upward momentum.
Read 7 tweets
Menthor Q Profile picture
Mar 9
1/ Markets rarely move in straight lines.

This chart tracks a 5-day swing model for $SPX, which helps highlight when price is stretching toward short-term extremes.

Right now, SPX is drifting away from the upper range and moving back toward the middle of the model. Image
2/ The model works with three key zones:

• Upper Band → where rallies often start to stall
• Lower Band → where pullbacks often find support
• Risk Trigger → a deeper downside level that signals larger stress

Price tends to oscillate between these areas.
3/ Recently, SPX spent a lot of time pushing toward the upper band, showing strong upward momentum.

But the latest move shows price pulling away from that upper zone, which often happens after markets become stretched.
Read 7 tweets
Menthor Q Profile picture
Mar 6
1/ One way to see how the options market is feeling about risk is through the volatility smile.

Right now, that smile is getting steeper and that shift can reveal how traders are positioning around $SPX. Image
2/ The curve shows implied volatility across different strike prices.

When the left side of the smile rises (lower strikes), it usually means downside protection is becoming more expensive.

That’s exactly what we’re seeing.
3/ Compared to yesterday, last week, and even a month ago, deep downside strikes are carrying higher implied volatility.

That tells us traders are placing more emphasis on hedging downside risk.
Read 5 tweets
Menthor Q Profile picture
Mar 5
1/ The options market is clearly focused on the short-term right now.

$SPX hasn’t collapsed, but the volatility curve shows traders are still pricing more uncertainty in the front of the curve.

In other words: near-term risk is still on the radar. Image
2/ Compared to yesterday, short-dated volatility has eased slightly.

But zooming out, the curve still shows a noticeable premium in the front end relative to the rest of the structure.

That usually happens when markets are navigating an active period.
3/ Interestingly, longer-dated volatility hasn’t followed the same move higher.

That suggests the market isn’t necessarily pricing a large structural shift, but rather short-term instability.

More noise than panic.
Read 5 tweets
Menthor Q Profile picture
Feb 27
1/ If you just look at the index, everything seems fine.
$SPX is still hanging up near the highs.

No obvious panic. No obvious breakout.

But when you look underneath the surface, the tone is a little more nuanced. 👇🧵 Image
2/ In true “melt-up” phases, you usually see a surge where hundreds of stocks get overbought at the same time. That’s crowd behavior.

That’s momentum feeding on itself.

We’re not seeing that kind of rush right now.
3/ Instead, participation looks rotational.

Some stocks get hot → cool off. Others take their place.

That creates movement without extreme overheating.
Read 7 tweets
Menthor Q Profile picture
Feb 26
1/ $SPX is still up near the highs and the trend hasn’t broken.

But if you zoom out a bit, you’ll notice the push behind this move isn’t as strong as it was before.👇🧵 Image
2/ During strong trend phases, systematic funds (CTAs) tend to add exposure as price rises.

That creates a feedback loop:
Uptrend → more buying → stronger uptrend.

We saw that dynamic during prior acceleration phases.
3/ Now?

Price is still elevated but CTA positioning has been easing off.

That tells us the feedback loop isn’t as powerful anymore.

The trend isn’t being aggressively reinforced.
Read 7 tweets

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