Oil Is Driving the Entire Market
Gianni Di Poce just connected two dots that most traders are missing. Crude oil and the VIX are tracking each other almost tick for tick on the 15 minute chart. That correlation explains why rallies keep failing. Gianni laid out the data clearly… Rising energy prices create the worst forward return environment for stocks compared…
Institutions Are Betting Both Sides
Brandon Chapman just pulled up today's block trade data, and institutions are placing massive bets on the Persian Gulf outcome. Both outcomes. The BlockHunter console screened 1,780 option trades today and narrowed them down to 39 block trades of 1,000 contracts or more. The pattern tells you exactly how big money is positioning. The VIX…
I woke up in the middle of the night and knew they had to do something.
I woke up in the middle of the night to use the bathroom, looked at the futures, and thought: they have to do something. I have been watching vol for thirty years. I built the expected move framework at thinkorswim from scratch. When the S&P is melting away at 3 AM, you do not need…
The weekly expected move was $188.88. The market tested both edges this morning.
The weekly expected move for the S&P this week is $188.88. That means the options market, before a single tweet dropped, before a single headline ran, priced in a range of roughly 6,508 on the downside to 6,695 on the upside. Write those numbers down. Because everything that happened this morning fits inside that range…
Into the Extreme: Exploding Rates and Cracking Internals
Gold just breached the lower edge of its expected move for the third straight week. That kind of liquidation in metals only happens when major banking institutions need to raise capital. The S&P 500 sold off nearly 2% on triple witching Friday. Interest rates exploded. Bonds tanked alongside equities. And gold dropped over two and…
The market hasn't moved in 11 weeks. That's not good news.
Eleven consecutive weeks without touching the edge of the expected move. Let that sit for a second. The expected move is the range the options market prices in for any given week. It is a specific dollar number derived from implied volatility, the market's own estimate of how far it expects to move. When the…
$5.7 trillion expires today. Not in the morning. At the close.
$5.7 trillion expires today. Not at the open. Not a typo. $5.7 trillion in options contracts clear today. Roughly $2 trillion hit at the morning open when the SPX AM settlement fired, and the rest rolls off at today's close. Most traders spent the morning watching oil prices and reading headlines about Iran. Here is…
We Haven't Hit Bottom Yet
The S&P 500 closed down 111 points today in what I call a full court press. Sell side activity hit across the board with a high degree of correlation inside the index. The dollar ripped higher. There was nowhere to hide. But here is the part that should keep you up tonight. The S&P 500…
Fed Day, Negative Gamma, and 3 Setups That Could Explode Today
I just wrapped my segment on Schwab, and I had to get this out right as the Fed makes its announcement. Fed Day. Zero rate expectations. And the S&P is sitting on a gamma time bomb. Here's what nobody's talking about: dealers are sitting in negative gamma right now. That means if the market starts…
I Was Right About the Market. I'm Still Losing Money.
Being right is not enough. I hear it constantly. A trader got the direction right, the market moved exactly where they said it would, and they still lost money. They are frustrated. Confused. And usually convinced they did something wrong. They did not do anything wrong. They just learned one of the most important lessons…