Thread by @WizOfOps

Good Morning! A large drop and rebound yesterday as $MSFT had a gloomy forecast, but why the rebound? Yesterday was driven by 0DTE flows almost exclusively after the initial drop, as noted in the public discord room.

A lot of clamoring over GDP this morning...

But the options market doesn't seem to care, pricing a 1-day straddle at $31, which would be the same if there was no catalyst. These events recently have been met with decent market movement prediction and data forecasts within range, but this one is a little curious.

Last month we saw a sharp downturn in retail sales, contraction in manufacturing and services production, and a construction and housing downturn. I'm curious about how economists believe GDP will grow at a 2.6% annualized real rate, and GDPNOW expects 3.5%. Where is the growth?

I presume services and govt. spending? But there are now caps to govt. spending as we have reached the debt ceiling, so that cannot be optimistic going forward. Regardless the market is sanguine about these concerns and focuses on Fed action,

which makes the case for liquidity as the majority driver of markets, including dealer positioning in #volland which has shown charm bullishness with a capped vanna upside. It has settled in a little higher range than anticipated, but I expect similar action to continue,

With shocks more likely to the downside as we saw yesterday.

But again from an economic perspective, I'm curious about this GDP report and the contributions from each subsection. If it runs counter to these other reports, it would have me do a deeper dive for reconciliation.