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Dj30

DAX/DJI bearish or not ?tp1 and tp2 or vice versa ? Please see my first published idea . Is my point in there wrong ? With no healthcare/tax reform in US why is dow30 going up ? On the other hand, the big boys - the whales - those who moves the markets can't go with the trend and with their huge money rapidly clearing the markets . So they can match their big pile of money only on the countertrend - when cohorts of little fish are going upstream the whales are going downstream and vice versa . In the end things come back where they must be even if for the moment they are running in the opposite way . Therefore it may be first tp1 and then tp2 or vice versa . But sooner than later I see a big downfall for both dji/dax because I don't see healthcare/tax reform in US done this year . Even worst I have not seen such high opposition to an US president like against Trump .
FX:GER30
by DoubleMan
US EQUITY INDEX STRAT - FOMC FED: TP ON THE DIP & FADE THE RALLYFED/ FOMC Tactical 18hr trading strategy: 1. With active structural shorts from 2180 (previously discussed/ entered) take profits "early" into the intermediate lows at 2100-2120 that we are likely to see into Fed volatility given hawkish surprise which may or MAY not occur. - Taking profit even at higher levels (if the hike surprise pricing is less aggressive e.g. 2140 only reached) at 2140 is also advisable, given from 2140 we are highly likely to see 2160/80 on the day of a no hike as excitement builds a 1-1.8% rally. 2. Structurally re-short and fade the no hike rally/ exuberance into the highs at 2180 - this strategy effectively pays the 40-80pts in profit ABOVE what would be received without playing the Fed; which in itself is a high 10-25% of the whole initial structural move to 2000 which we are waiting for anyway which is clearly a great tactical opportunity. Risks to the view: 1. The fed does indeed hike, in which case, SPX moves on the day 5-6% lower thus TP is hit "early" and unable to reshort - but the probability of this IMO is close to zero. 2. Of course short risks continue e.g. fed no hike causes ANOTHER leg higher through 2200 but this too imo is unlikely given bulls are exhausted and much of a "No hike" is priced in already.. i dont think US equities have more than a 1-2% retest but fail at highs rally left in them.
TVC:SPXShort
by QuantumLogicTrading
US EQUITY INDEX STRAT - FOMC FED: TP ON THE DIP & FADE THE RALLYFED/ FOMC Tactical 18hr trading strategy: 1. With active structural shorts from 2180 (previously discussed/ entered) take profits "early" into the intermediate lows at 2100-2120 that we are likely to see into Fed volatility given hawkish surprise which may or MAY not occur. - Taking profit even at higher levels (if the hike surprise pricing is less aggressive e.g. 2140 only reached) at 2140 is also advisable, given from 2140 we are highly likely to see 2160/80 on the day of a no hike as excitement builds a 1-1.8% rally. 2. Structurally re-short and fade the no hike rally/ exuberance into the highs at 2180 - this strategy effectively pays the 40-80pts in profit ABOVE what would be received without playing the Fed; which in itself is a high 10-25% of the whole initial structural move to 2000 which we are waiting for anyway which is clearly a great tactical opportunity. Risks to the view: 1. The fed does indeed hike, in which case, SPX moves on the day 5-6% lower thus TP is hit "early" and unable to reshort - but the probability of this IMO is close to zero. 2. Of course short risks continue e.g. fed no hike causes ANOTHER leg higher through 2200 but this too imo is unlikely given bulls are exhausted and much of a "No hike" is priced in already.. i dont think US equities have more than a 1-2% retest but fail at highs rally left in them.
TVC:SPXShort
by QuantumLogicTrading
1
DOW JONES SHORT: Monthly Divergence, Fed HikeThe Dow reached as low as 17905 earlier in the day, but has since recovered somewhat to 18150. Technically: The Dow is due for a large correction to the downside. There is strong divergence on the monthly chart towards 18500. The target would be the missed monthly pivot at 16300. Fundamentally: US stocks are due for a correction to the downside, because the Fed will hike at least once this year. If they do not hike in September, this will be an opportunity to add to short positions through the election. I am short on the Dow from 18500, and added on the pullback to 18150. This index should reach 16300 given enough time, as the Fed has to hike sooner rather than later if it wants its credibility to remain intact.
FX:US30Short
by Exercise-Discipline
SELL US EQUITIES - SPX: OPTION VOLUME BREAKS +2SD & BREXIT HIGHSSPX downside to 2000 Option Volume: 1. Total CBOE -0.79% Equity option volume broke Brexit highs and 1YR +2StanDevs at 36 to trade at 38 (and 70% higher on the day) indicating we are entering an aggressive sell-off period (holders of underlying have scrambled to hedge their exposure in a fashion more aggressive than brexit! - which is particularly saying something given that we saw SPX -2.45% trade 10% lower on brexit vol 8.82% ). - Thus this imo reinforces my opinion posted a few weeks ago (attached) which highlighted perfect downside technical/ price action that we will likely reach the 2000 level/ brexit lows given the amount of brexit like correlation we are seeing. Implied Vols: 1. VIX 39.89% traded aggressively on the bid as expected but the move lagged spot developments so wasnt much of a leading signal this time however, ex post there has been a number of bearish signals: - Volatility of the VIX 39.89% reached +2SD and climbed some 30% on the day, indicating the move higher in VIX 39.89% was perhaps more than just noise that is likely to be faded as we often see with equity vols. - SPX -2.45% Bid and Ask volatility spiked 39/6% vs 40.6%, with offer vol 8.82% now outpacing bid by apprx 70bps indicating short funding is continually being squeezed a little more relatively (through higher demand) which is another sign there could be a rebalancing lower. SPX Positioning: 1. I am short from 2182 avg and will hold until downside momentum looks to fade likely somewhere near 2000. Election, Fed, Bull exhaustion risks are all the function of this downside imo, and all pretty equally distributed at that e.g. fed accommodation has to fade sooner rather than later with most members doing their best to offer hawkish tones despite poor data (though nothing shocks me as to their ability to ease markets). More certainly though, bulls at new highs for 4wks being unable to push higher despite perfect conditions (very poor data) showed they were clearly exhausted and finally the election risks particularly given the two v poor candidates can only weigh on risk markets. - Not to mention historically September is the worst month for SPX -2.45% vs August being the historically best (poor liquidity transferring to lower vol 8.82% likely the cause) so another quick stat reason to be short. Risks to the short view: 1. Potential downside views to shorts (or topside risk) are that FOMC failing to hike causes more monpol induced euphoria but at these low implied probabilities any "fed no go" topside will likely be constrained to a 2% recovery rally at best and will be heavily faded at that. Bare in mind and as above fed speakers have done their best given conditions to remain hawkish so it will likely be a hawkish "No action" which once again limits topside imo. Tactical notes: From a micro perspective Real money clients are unlikely to be behind this move lower yet, today imo will just be the algo and HF community - further given LDN and Asia session was over for the main period of losses (and half of NY), i am expecting more profit taking/ selling next week once the slow money has had time to reposition and the rest of the world accounts react to the price action. Questions, Comments and Likes appreciated!
OShort
by QuantumLogicTrading
1
EQUITY MARKETS - SPX: OPTION VOLUME ABOVE +2SD & BREXIT HIGHSSPX downside to 2000 Option Volume: 1. Total CBOE Equity option volume broke Brexit highs and 1YR +2StanDevs at 36 to trade at 38 indicating we are entering an aggressive sell-off period (holders of underlying have scrambled to hedge their exposure in a fashion more aggressive than brexit! - which is particularly saying something given that we saw SPX trade 10% lower on brexit vol). - Thus this imo reinforces my opinion posted a few weeks ago (attached) which highlighted perfect downside technical/ price action that we will likely reach the 2000 level/ brexit lows given the amount of brexit like correlation we are seeing. Implied Vols: 1.VIX traded aggressively on the bid as expected but the move lagged spot developments so wasnt much of a leading signal this time however, ex post there has been a number of bearish signals: - Volatility of the VIX reached +2SD and climbed some 30% on the day, indicating the move higher in VIX was perhaps more than just noise that is likely to be faded as we often see with equity vols. - SPX Bid and Ask volatility spiked 39/6% vs 40.6%, with offer vol now outpacing bid by apprx 70bps indicating short funding is continually being squeezed a little more relatively (through higher demand) which is another sign there could be a rebalancing lower. SPX Positioning: 1. I am short from 2182 avg and will hold until downside momentum looks to fade likely somewhere near 2000. Election, Fed, Bull exhaustion risks are all the function of this downside imo, and all pretty equally distributed at that e.g. fed accommodation has to fade sooner rather than later with most members doing their best to offer hawkish tones despite poor data (though nothing shocks me as to their ability to ease markets). More certainly though, bulls at new highs for 4wks being unable to push higher despite perfect conditions (very poor data) showed they were clearly exhausted and finally the election risks particularly given the two v poor candidates can only weigh on risk markets. - Not to mention historically September is the worst month for SPX vs August being the historically best (poor liquidity transferring to lower vol likely the cause) so another quick stat reason to be short. Risks to the short view: 1. Potential downside views to shorts (or topside risk) are that FOMC failing to hike causes more monpol induced euphoria but at these low implied probabilities any "fed no go" topside will likely be constrained to a 2% recovery rally at best and will be heavily faded at that. Bare in mind and as above fed speakers have done their best given conditions to remain hawkish so it will likely be a hawkish "No action" which once again limits topside imo. Tactical notes: From a micro perspective Real money clients are unlikely to be behind this move lower yet, today imo will just be the algo and HF community - further given LDN and Asia session was over for the main period of losses (and half of NY), i am expecting more profit taking/ selling next week once the slow money has had time to reposition and the rest of the world accounts react to the price action. Questions, Comments and Likes appreciated!
OShort
by QuantumLogicTrading
4
CBOE EQUITY OPTION VOLUME: 40% HIGHER FRIDAY & 1SD ABOVE 3M AVRGCBOE Equity Option Volume: 1. Total Equities Option volume now trades above all moving averages and is currently 1 deviation above the 3 month and 1 month average - we moved 40% higher on Friday post yellens hawkish Jackson Hole Speech, from 1700000 to 2500000. - Though we remain about 40-50% below the "risk-off" shift levels that we usually see in a firm bear market (Brexit and Yuan deval/ Feb sell off levels trade at 3700000) 2. This is important as increasing equity options is highly correlated with risk-off markets (as investors increasingly turn to derivs to hedge their long cash exposure) - watching closely for another 40% move higher, which is easily possible given Fridays move as this will likely signal the start of the september sell-off that I have been expecting. 3. Short SPX is my view on any rallies into 2180 this week - looking to double my position here. Questions, Comments and Likes encouraged!!
OShort
by QuantumLogicTrading
2