Last week was super interesting on multiple fronts (Powell sticking around, new Covid variant, etc.). Despite seeing a big risk-off movement due to Omicron strain on Friday, we are long-biased going into this week. Here is why:
1. There was **heavy** dark pool activity in SPY
2. The sell off on Friday pushed dealers into a huge negative gamma position (appx. -$1.4 Billion). When we see high dark pool prints AND low gamma prints, this very often leads to a reversal
3. VIX was sent into orbit on Friday, closing just under 29 (plenty of room for a VIX crush rally). Additionally, there was large amount of dark pool activity in SVXY on Friday (which is short VIX).
Since we're long-biased, our ES plan is pretty simple:
1. Would love the opportunity to get long in BTD 1 area. I will look to get 4600 calls for end of December or January
2. I want to see a close above Bull Target 1 area for more upside. If we fail to close above early this week, we likely will need to change our bias
3. If we do close above Bull Target 1, retracements back into Bull Target areas can be used as long entries.
Note: this is purely based on technical analysis. Any news around Omicron being vaccine-resistant (for example) will likely have a huge effect on the market and will take precedent over this analysis.
1. There was **heavy** dark pool activity in SPY
2. The sell off on Friday pushed dealers into a huge negative gamma position (appx. -$1.4 Billion). When we see high dark pool prints AND low gamma prints, this very often leads to a reversal
3. VIX was sent into orbit on Friday, closing just under 29 (plenty of room for a VIX crush rally). Additionally, there was large amount of dark pool activity in SVXY on Friday (which is short VIX).
Since we're long-biased, our ES plan is pretty simple:
1. Would love the opportunity to get long in BTD 1 area. I will look to get 4600 calls for end of December or January
2. I want to see a close above Bull Target 1 area for more upside. If we fail to close above early this week, we likely will need to change our bias
3. If we do close above Bull Target 1, retracements back into Bull Target areas can be used as long entries.
Note: this is purely based on technical analysis. Any news around Omicron being vaccine-resistant (for example) will likely have a huge effect on the market and will take precedent over this analysis.
Comment:
Multiple opportunities already presented for long entries based on guidance in original post:
