Bear Rally has Arrived
Updated
I know everyone has been waiting on a bear rally and I'm seeing a bunch of signals pointing to this being the breakout for one.
Both bulls and bears got shaken one way then the next last week.
This weeks update on the market index hedges is forecasting a rally into the end of October.
JHEQX Playbook.
After reset JHEQX provided firm support at its zero gamma range. It almost seemed unnatural the past few trading days.
JHEQX shows us after reset there is support there is typically a break at reset or rally.
Last 2 resets
Same structure repeating.
Looking back at the crash of 2020, it occurred during JHQTX window of weakness and flipped the big hedge JHEQX into negative gamma and right through JHEQX WOW into OPEX Quad Witching.
JHQDX Playbook
This is about the time JHQDX and its 14k contracts make a run out of the money.
Since this a long put position, dealers are short futures.
This plays right into October 31 Corp. Buyback blackout periods are reducing.
If earnings aren’t to bad this week. We could see a run up to 3900 by Oct 31.
Update on Indicator.
I’m currently working on solving the issues with implied volatility.
It’s a complicated problem without having options quote and historical prices for options.
In the mean time I will keep publishing updates on the equity hedges.
Not Financial Advice
As always, these hedging theories are just that, theories. They usually take weeks to confirm and play out so keep that in mind.
China is holding back GDP numbers and there could be land mines all throughout earnings.
If you use any of my publications for trading. Have stops. Don't trade 0DTE unless you are gambling.
There are plenty of tail risks and markets will continue to move 1 step forward and 2 steps back until some sense of normality in bonds and commodities is achieved.
Both bulls and bears got shaken one way then the next last week.
This weeks update on the market index hedges is forecasting a rally into the end of October.
JHEQX Playbook.
After reset JHEQX provided firm support at its zero gamma range. It almost seemed unnatural the past few trading days.
JHEQX shows us after reset there is support there is typically a break at reset or rally.
Last 2 resets
Same structure repeating.
Looking back at the crash of 2020, it occurred during JHQTX window of weakness and flipped the big hedge JHEQX into negative gamma and right through JHEQX WOW into OPEX Quad Witching.
JHQDX Playbook
This is about the time JHQDX and its 14k contracts make a run out of the money.
Since this a long put position, dealers are short futures.
This plays right into October 31 Corp. Buyback blackout periods are reducing.
If earnings aren’t to bad this week. We could see a run up to 3900 by Oct 31.
Update on Indicator.
I’m currently working on solving the issues with implied volatility.
It’s a complicated problem without having options quote and historical prices for options.
In the mean time I will keep publishing updates on the equity hedges.
Not Financial Advice
As always, these hedging theories are just that, theories. They usually take weeks to confirm and play out so keep that in mind.
China is holding back GDP numbers and there could be land mines all throughout earnings.
If you use any of my publications for trading. Have stops. Don't trade 0DTE unless you are gambling.
There are plenty of tail risks and markets will continue to move 1 step forward and 2 steps back until some sense of normality in bonds and commodities is achieved.
Note
Intraday playbook was an easy read.Squeeze in Premarket.
Vanna Rally in AM to 10AM
Base all day in opening range.
Rally in PM after hours.
Note
Good earnings this morning from GS and NFLX beat after close.Overnight Asia session continues to drive up stocks and drive down the dollar.
Intraday is providing traders with big swings up and down.
A large amount of 0DTE options are providing the majority of the recent volatility we are seeing.
Measuring 0DTE and 1DTE and Weekly Gamma in SPX and VOL is providing actionable direction for scalpers and swing traders.
Next website update I will split my GEX charts into smaller timeframes. I'm still looking for no delay option quotes for free/cheap. If anyone knows a good source please DM me.
Note
3685 continues to be a major pivot level. Resistance yesterday, support today.
Note
Next level of resistance 378.Get Next Resistance / Support level from the past.
Review for Intraday for past weeks sessions
NFLX ERs always provide good indication of direction.
Note
HSI down 2.4% which brought down indexes in overnight session.Note
Asia and Vixperation making today a sell.Losing 3685 no bueno.
Note
Held 3685 into close and overnight. barely.Be cautious, there is a large standing order at 3670. ES was pulling down all day yesterday trying to fill. It's likely today or tomorrow we see that order get filled.
OPEX is Friday. If indexes can get through until Monday, the bear rally might be free to continue higher into the 3800 range next week.
We may just see JHQDX put strike finish ITM. I'll go back and see how many times and what circumstances the puts finish ITM.
Note
Can clearly see by VIX and the size of circles (larger = higher gamma, smaller = closer to 0 gamma)The lack of Gamma Squeezes of the dealer short positions is correlated with higher volatility.
We may not see that squeeze over 3800. VIX is sustaining higher levels for longer is directly impacting dealer flows.
Note
VIX got absolutely smashed in opening this morning.Some resistance at Tuesdays close but meat (short squeezes) is back on the menu. Vixperation may have freed up vix to drop down. Tomorrows OPEX will be interesting price movement until then.
Note
pretty much range bound here.watching the VIX for direction now. This is a critical level. Gap down in vix would induce that vol compressing, short squeezes seen in the summer rally.
Note
odd liquidity in indexes today. That order at 3670 ES is just about to get filled. Could this break support and send us lower or a quick V recovery into end of day.Note
Sorry about the lack of updates. Been busy with work.Trend continues upward despite all headwinds from China, EU, dollar, etc..
my target remains 3900 by Dec 31.
The Oct 6 resistance proved to be pivotal to gap up to Sept support.
Holding this sept support over the next few days will be key to making the next run up to 3900.
Note
If you wonder where I get the levels from. just look to the past.Note
Fake Out before the Breakout.Some tough earnings. Can't win them all.
Google and Microsoft need to lower the bar.
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