The 2022 November quarterly GME run is here.
I'm looking at my indicators to see whether we're gonna have an Opex or Nopex. 2/4 of my indicators tell me that it's a coinflp between an OPEX and a Nopex. Sorry, i know this is not what you wanted to hear, but...
1) Indicator 1 - Swaps (Negative)
Swaps on GME the other peripheral stocks like AMC/BBBY/XRT are minimal as usual... This means that there's no swap based volume support for this rally and that it's possibly all moving just due to dealer hedging for 0 to 1dte options for this big Opex. TLDR: Swaps say there won't be a big move up next week.
2) Indicator 2 - XRT Put OI Drop (Positive)
According to a source who has his own indicator based on XRT's Put OI where if the OI drops on certain dates, it indicates that a run is coming soon... he says that the Put OI drop has occurred and that we're up for a run. This indicator has worked for him 2/3 times so far, so his indicator is positive for this run. We had a previous Nopex where the indicator strongly showed we're due for a run but we instead dumped.
3) Indicator 3 - Market Opex Behavior (Mixed)
There's a certain behavior the market does during Opex which strongly indicates whether it's an Opex or Nopex.
-We dump for the second and third week of the month (Sorta happened)
-Near the end of the third week (this week) there's a magic market recovery on Thursday and or Friday (Happened)
-Vix starts to drop on Friday (Happened)
This indicates extreme confidence for a run next week. It's one of my strongest indicators.
However, in the previous run for August and the one in May, what has started happening is that the entire market is that some big names in the market pump on the first couple of weeks of the month, then they dump and while they're dumping, some of the other less known memes are pumping in the second week. On the third week, GME the main memes run for 2 days indicating something will happen next week, but then as the weekend passes and Monday comes, the market dies and it dies all the way into the next month for 15-20 days.
4) Indicator - 4 MSM Behavior
Basically the current market gives me no choice but to buy a few calls for next week for GME, then i need to see if the MSM will tell us all that the world is ending on Monday with Monkeypox(Where did the marketing team on Monkeypox go btw?) or an ICBM from North Korea or something about inflation suddenly being super serious during the weekend, then it means they want everyone to sell and this we're in for a GME run and price pump. If there's no reports of world ending events, be scared and dump your calls.
5) Indicator 5 - OCC Hedging Loans
The OCC shows how much collateral is being posted for short positions. Basically if there's gonna be pump on Monday, there will also be an increase in the OCC's Hedging Balance for certain stocks. So far the data shows a small trend upwards as of a few days ago, but it is unconfirmed as it's still a really small curve. The big data comes out tomorrow because the OCC data is EOD data for today, and so we'll know then if someone's doing something next week.
6) Indicator 6 - Borrow Fee
The OCC hedging loans & the borrow fee go together. If one increases, the other will increase along with it and this indicates that we'll have a massive pump next week. The borrow fee has increased a little bit but not enough to indicate a run. Also the OCC hedging balance has not increased yet to indicate a run. Again, must wait to see how today develops. The prudent action here is to get calls first, ask later (Chukumba)
Lastly
Keep in mind that if we do run up and not down next Tuesday, the initial spike is usually the biggest e.g it's all downhill after that. If the spike isn't big enough for the day, it means that the run isn't on next weeks' Tuesday, but the week after. You have to adjust your strat accordingly. These cyclical runs behave in a certain way that i've been watching for the past 2 years now. TLDR, i'll update this post with new comments of what's up over the weekend and on Monday to tell you if we're running or not.
Conclusion
I think the market's gonna dump and that we're seeing some pumping today is because of heding requirements for 0 day to expiry options. There will obviously be the usual price pump on SPY and many stocks 15 minutes before close as brokers pre-emptively close people's expiring options which will cause a tiny pump, but i think that's all she sang.
I need to see today's EOD OCC data to be able to say that we'll have an SLD Opex next week and not a Nopex. So far i'm negative for a successful opex, but i have to grab a few calls to be in just in case. Also keep in mind FTX just fell and if it was reaaally being used for locates, then this opex could be insanely good unless they have a temporary stopgap for now.
The reason why i didn't want to mention when the cycle may occur in my last post is because people buying calls on the day of the pump MAY (unconfirmed) cause price suppression due to hedging requirements and may be why our SLD/Opex runs are so weak or inexistent. Alternatively the reason i believe more likely to be the reason for diminished Opex/SLD runs is because of the successful campaing on Reddit to make people not buy options over time. No option buying, no dealer movements, no price movement. Again, equally, it could all be because everyone DOES buy calls & hedging those on the dealer side is what screws us.
Regardless, this last of part in my conclusions is more close to theories and tinfoil than something you should listen to i think (Up to you really). I wish you luck on whatever you decide to do. I'm keeping my long puts on most of the market and some straddles i have on other names like BRK.B & RBLX. For GME i already bought a few calls a few days ago on low IV and i'm hesitant to get more at this point with this IV jackup, but i might grab a couple more... i dunno. You can bet ya that CC sellers will take advantage of this IV and will sell CC's into it... so be careful, don't go nuts on this cycle.
Until next time regards.
I'm looking at my indicators to see whether we're gonna have an Opex or Nopex. 2/4 of my indicators tell me that it's a coinflp between an OPEX and a Nopex. Sorry, i know this is not what you wanted to hear, but...
1) Indicator 1 - Swaps (Negative)
Swaps on GME the other peripheral stocks like AMC/BBBY/XRT are minimal as usual... This means that there's no swap based volume support for this rally and that it's possibly all moving just due to dealer hedging for 0 to 1dte options for this big Opex. TLDR: Swaps say there won't be a big move up next week.
2) Indicator 2 - XRT Put OI Drop (Positive)
According to a source who has his own indicator based on XRT's Put OI where if the OI drops on certain dates, it indicates that a run is coming soon... he says that the Put OI drop has occurred and that we're up for a run. This indicator has worked for him 2/3 times so far, so his indicator is positive for this run. We had a previous Nopex where the indicator strongly showed we're due for a run but we instead dumped.
3) Indicator 3 - Market Opex Behavior (Mixed)
There's a certain behavior the market does during Opex which strongly indicates whether it's an Opex or Nopex.
-We dump for the second and third week of the month (Sorta happened)
-Near the end of the third week (this week) there's a magic market recovery on Thursday and or Friday (Happened)
-Vix starts to drop on Friday (Happened)
This indicates extreme confidence for a run next week. It's one of my strongest indicators.
However, in the previous run for August and the one in May, what has started happening is that the entire market is that some big names in the market pump on the first couple of weeks of the month, then they dump and while they're dumping, some of the other less known memes are pumping in the second week. On the third week, GME the main memes run for 2 days indicating something will happen next week, but then as the weekend passes and Monday comes, the market dies and it dies all the way into the next month for 15-20 days.
4) Indicator - 4 MSM Behavior
Basically the current market gives me no choice but to buy a few calls for next week for GME, then i need to see if the MSM will tell us all that the world is ending on Monday with Monkeypox(Where did the marketing team on Monkeypox go btw?) or an ICBM from North Korea or something about inflation suddenly being super serious during the weekend, then it means they want everyone to sell and this we're in for a GME run and price pump. If there's no reports of world ending events, be scared and dump your calls.
5) Indicator 5 - OCC Hedging Loans
The OCC shows how much collateral is being posted for short positions. Basically if there's gonna be pump on Monday, there will also be an increase in the OCC's Hedging Balance for certain stocks. So far the data shows a small trend upwards as of a few days ago, but it is unconfirmed as it's still a really small curve. The big data comes out tomorrow because the OCC data is EOD data for today, and so we'll know then if someone's doing something next week.
6) Indicator 6 - Borrow Fee
The OCC hedging loans & the borrow fee go together. If one increases, the other will increase along with it and this indicates that we'll have a massive pump next week. The borrow fee has increased a little bit but not enough to indicate a run. Also the OCC hedging balance has not increased yet to indicate a run. Again, must wait to see how today develops. The prudent action here is to get calls first, ask later (Chukumba)
Lastly
Keep in mind that if we do run up and not down next Tuesday, the initial spike is usually the biggest e.g it's all downhill after that. If the spike isn't big enough for the day, it means that the run isn't on next weeks' Tuesday, but the week after. You have to adjust your strat accordingly. These cyclical runs behave in a certain way that i've been watching for the past 2 years now. TLDR, i'll update this post with new comments of what's up over the weekend and on Monday to tell you if we're running or not.
Conclusion
I think the market's gonna dump and that we're seeing some pumping today is because of heding requirements for 0 day to expiry options. There will obviously be the usual price pump on SPY and many stocks 15 minutes before close as brokers pre-emptively close people's expiring options which will cause a tiny pump, but i think that's all she sang.
I need to see today's EOD OCC data to be able to say that we'll have an SLD Opex next week and not a Nopex. So far i'm negative for a successful opex, but i have to grab a few calls to be in just in case. Also keep in mind FTX just fell and if it was reaaally being used for locates, then this opex could be insanely good unless they have a temporary stopgap for now.
The reason why i didn't want to mention when the cycle may occur in my last post is because people buying calls on the day of the pump MAY (unconfirmed) cause price suppression due to hedging requirements and may be why our SLD/Opex runs are so weak or inexistent. Alternatively the reason i believe more likely to be the reason for diminished Opex/SLD runs is because of the successful campaing on Reddit to make people not buy options over time. No option buying, no dealer movements, no price movement. Again, equally, it could all be because everyone DOES buy calls & hedging those on the dealer side is what screws us.
Regardless, this last of part in my conclusions is more close to theories and tinfoil than something you should listen to i think (Up to you really). I wish you luck on whatever you decide to do. I'm keeping my long puts on most of the market and some straddles i have on other names like BRK.B & RBLX. For GME i already bought a few calls a few days ago on low IV and i'm hesitant to get more at this point with this IV jackup, but i might grab a couple more... i dunno. You can bet ya that CC sellers will take advantage of this IV and will sell CC's into it... so be careful, don't go nuts on this cycle.
Until next time regards.
Comment:
TLDR: I'm of the opinion that this is a Nopex. But i'm partially in just in case. Never hurts to lose a bit of credit card money.
Comment:
OCC Hedge Balances 2022
imgur.com/LZWOoEG
OCC Hedging Balance & Market Loan Balances. These will basically increase along with the borrow fee if someone wants to go short. When these increase, GME and all the memes including the whole market have their price run. I've added vertical lines indicating Opexes and Nopexes. Nov 2021 and Aug 2022 were Nopexes.
If there were to be even a small move, one of the 4 stocks should have an elevated Market Loan Balance or Hedge Loan Balance. Currently there's no elevation on either... in fact the Hedge Loan balance is moving down for some of them.
Last chance for either to spike even a little bit is Monday EOD in this data... but honestly there would've been a spike in either of the two by now and there's nothing... so... i think Friday was the IV jacking & rug.
OCC Hedge Balances 2019 - 2022
imgur.com/5TwsmgZ
A longer duration chart from 2019 for your information so you can know what an Opex and Nopex looks like. You'll see that either Hedging LoanBalance or Market Loan Balance should be elevated during/before a run and that they currently arent...
Good thing i didn't go nuts with GME calls...
imgur.com/LZWOoEG
OCC Hedging Balance & Market Loan Balances. These will basically increase along with the borrow fee if someone wants to go short. When these increase, GME and all the memes including the whole market have their price run. I've added vertical lines indicating Opexes and Nopexes. Nov 2021 and Aug 2022 were Nopexes.
If there were to be even a small move, one of the 4 stocks should have an elevated Market Loan Balance or Hedge Loan Balance. Currently there's no elevation on either... in fact the Hedge Loan balance is moving down for some of them.
Last chance for either to spike even a little bit is Monday EOD in this data... but honestly there would've been a spike in either of the two by now and there's nothing... so... i think Friday was the IV jacking & rug.
OCC Hedge Balances 2019 - 2022
imgur.com/5TwsmgZ
A longer duration chart from 2019 for your information so you can know what an Opex and Nopex looks like. You'll see that either Hedging LoanBalance or Market Loan Balance should be elevated during/before a run and that they currently arent...
Good thing i didn't go nuts with GME calls...
Comment:
Ryan used to be my other indicator of a run because he always tweets before a run... He's never tweeted on a Saturday just before an expected run...
This is bullish for me... but the OCC data shows otherwise, so i don't know what to believe anymore. I'm gonna stick with the data...
This is bullish for me... but the OCC data shows otherwise, so i don't know what to believe anymore. I'm gonna stick with the data...
Trade closed manually:
Yeah this is a Nopex. Sorry.