It's going to be an extremely tough week to trade ES. There is no clear directional sentiment. I'll point out arguments for each side:
Bullish sentiment:
- We saw some VERY aggressive buying (and selling of SPX puts) on Friday near lows. in a normal market, the sheer volume and intensity of these trades would have been enough to call a bottom.
- VIX is at absurdly high levels and statistically is bound to revert to its mean
- The 5 day MA of the dark index/GEX ratio is extremely bullish
- Seasonality is bullish this time of year
Bearish sentiment:
- Crypto sold off heavily this weekend, pointing to investors going risk-off mode
- TLT is soaring, indicating investors are fleeing to safe haven bonds
- We are of course still in negative gamma territory as well, which will force dealers to add fuel to the fire, especially under the absolute gamma level (4500)
There are many bull and bear target areas on this week's plan because it is an absolute toss up in terms of which way things will go. My pivot for tomorrow is 4560 - depending on where it opens during regular trading hours will dictate possible trades. My pivot for the week is 4615. I think we need to hold this level for more upside. Volatility should also subside a bit since we'll be over the volatility trigger at that point (4595).
Bullish sentiment:
- We saw some VERY aggressive buying (and selling of SPX puts) on Friday near lows. in a normal market, the sheer volume and intensity of these trades would have been enough to call a bottom.
- VIX is at absurdly high levels and statistically is bound to revert to its mean
- The 5 day MA of the dark index/GEX ratio is extremely bullish
- Seasonality is bullish this time of year
Bearish sentiment:
- Crypto sold off heavily this weekend, pointing to investors going risk-off mode
- TLT is soaring, indicating investors are fleeing to safe haven bonds
- We are of course still in negative gamma territory as well, which will force dealers to add fuel to the fire, especially under the absolute gamma level (4500)
There are many bull and bear target areas on this week's plan because it is an absolute toss up in terms of which way things will go. My pivot for tomorrow is 4560 - depending on where it opens during regular trading hours will dictate possible trades. My pivot for the week is 4615. I think we need to hold this level for more upside. Volatility should also subside a bit since we'll be over the volatility trigger at that point (4595).
Comment:
Vol trigger has moved to 4565. 2 possible trades off this level:
