SPX ES - Welcome To The Fourth Quarter Rodeo
Updated
Whether you want to look at these markets like an American football game or the National Finals Rodeo/Calgary Stampede bull riding, this final quarter of the year is set up to be quite the fireworks show.
The new JP Morgan fund options collar is illustrated on the chart, but let's put it into text:
JPM is the seller of 41,000 calls with a strike of 4,515
JPM is the buyer of 41,000 puts with a strike of 4,055
JPM is the seller of 41,000 puts with a strike of 3,420
Expiry is December 29, 2023.
So if you believe that JP Morgan, the pinnacle systemically important bank in the United States, is the market maker, the crude logic is that the bank is incentivized to:
1. Keep price away from 4,515
2. Drive price towards/under 4,055
3. Keep price away from 3,420
Now, this is cool, but last quarter was an identical setup at similar strikes, and JP Morgan paid the calls it sold at 4,600~ and its own puts at 4,200 expired worthless.
A collar from a big fund is just a position and you should always remember the banks have the money to hedge, and hedge, and overhedge.
And their overhedges, when combining with the psychological effect on both retail and fund-level market participants, can produce greater profits than the simple cashing in of their ostensible public positions.
The problem for SPX and equities bulls right now is that if a new all time high was to be set, we should have bounced to start October. The meaning of this is that filling in the range of the giant June uppy candle is actually bearish.
Because it's fundamentally bearish, we have no reason to believe that downside pivots are not the target. Ergo, we have no reason to justify long trades as more than a single-or-intraday scalp until a significant low is taken.
And that low should involve the May 4,062.25 target.
A raid below that, a consolidation above 4,000, a manipulation raid slightly under 4,000 to eat stops, and then a rip back to take out "resistance" at the 4,634 double top before the end of the year AND possible run the all time high, is absolutely the trade thesis.
A raid on 4,062 happens to put JPM's long puts directly in the money and they'll be free to exit with profit.
Then, the bank can pay or mitigate the buyers of its 4,515 calls before expiry, all while making bears hate their life.
If this all plays out as anticipated, 2024 will be significantly dark clouds. Always keep in mind that 2023 opened in a straight line uppy, and year candles VERY rarely repeat their patterns twice.
What is "the bear thesis" really predicated on? It's not the Federal Reserve or such and such recession.
It's the situation in Mainland China. There's a total worldwide media blackout on what's going on inside China.
But how much longer can the Chinese Communist Party and the boundless and eternal sins of organ harvesting Falun Dafa's 100 million students at the hands of Jiang Zemin since July 20, 1999 continue forward?
The Wuhan Pneumonia pandemic has claimed millions and millions of lives inside the Mainland, and that's before the catastrophes from the Party's corrupt officials itself, and all the flooding and economic damage.
In short, the CCP will soon fall before our very eyes, and everything will change.
2024 Presidential Election theatre in the United States won't really matter.
If you want to have a bright future and happiness, you need to turn off the television, turn off the radio, turn off YouTube, get off TikTok, and go outside and be in your community in real life.
You need to cut the brainwashing and start valuing virtue again, start living like humans again, start thinking like a human again.
Heaven is watching to see who can stand against the Red Demon of the Chinese Communist Party's international "United Front" parasite campaigns.
Whoever can't is considered the worst kind of loser.
But for now, fade the so-called "bottom" at 4,250 and strongly consider buying 3,985.
Just make sure you dump it, dump it again, and cash out at 4,700 or 4,800.
The happy days humans dream of not only never existed, but are forever gone. Everything is about to become stringently serious.
The new JP Morgan fund options collar is illustrated on the chart, but let's put it into text:
JPM is the seller of 41,000 calls with a strike of 4,515
JPM is the buyer of 41,000 puts with a strike of 4,055
JPM is the seller of 41,000 puts with a strike of 3,420
Expiry is December 29, 2023.
So if you believe that JP Morgan, the pinnacle systemically important bank in the United States, is the market maker, the crude logic is that the bank is incentivized to:
1. Keep price away from 4,515
2. Drive price towards/under 4,055
3. Keep price away from 3,420
Now, this is cool, but last quarter was an identical setup at similar strikes, and JP Morgan paid the calls it sold at 4,600~ and its own puts at 4,200 expired worthless.
A collar from a big fund is just a position and you should always remember the banks have the money to hedge, and hedge, and overhedge.
And their overhedges, when combining with the psychological effect on both retail and fund-level market participants, can produce greater profits than the simple cashing in of their ostensible public positions.
The problem for SPX and equities bulls right now is that if a new all time high was to be set, we should have bounced to start October. The meaning of this is that filling in the range of the giant June uppy candle is actually bearish.
Because it's fundamentally bearish, we have no reason to believe that downside pivots are not the target. Ergo, we have no reason to justify long trades as more than a single-or-intraday scalp until a significant low is taken.
And that low should involve the May 4,062.25 target.
A raid below that, a consolidation above 4,000, a manipulation raid slightly under 4,000 to eat stops, and then a rip back to take out "resistance" at the 4,634 double top before the end of the year AND possible run the all time high, is absolutely the trade thesis.
A raid on 4,062 happens to put JPM's long puts directly in the money and they'll be free to exit with profit.
Then, the bank can pay or mitigate the buyers of its 4,515 calls before expiry, all while making bears hate their life.
If this all plays out as anticipated, 2024 will be significantly dark clouds. Always keep in mind that 2023 opened in a straight line uppy, and year candles VERY rarely repeat their patterns twice.
What is "the bear thesis" really predicated on? It's not the Federal Reserve or such and such recession.
It's the situation in Mainland China. There's a total worldwide media blackout on what's going on inside China.
But how much longer can the Chinese Communist Party and the boundless and eternal sins of organ harvesting Falun Dafa's 100 million students at the hands of Jiang Zemin since July 20, 1999 continue forward?
The Wuhan Pneumonia pandemic has claimed millions and millions of lives inside the Mainland, and that's before the catastrophes from the Party's corrupt officials itself, and all the flooding and economic damage.
In short, the CCP will soon fall before our very eyes, and everything will change.
2024 Presidential Election theatre in the United States won't really matter.
If you want to have a bright future and happiness, you need to turn off the television, turn off the radio, turn off YouTube, get off TikTok, and go outside and be in your community in real life.
You need to cut the brainwashing and start valuing virtue again, start living like humans again, start thinking like a human again.
Heaven is watching to see who can stand against the Red Demon of the Chinese Communist Party's international "United Front" parasite campaigns.
Whoever can't is considered the worst kind of loser.
But for now, fade the so-called "bottom" at 4,250 and strongly consider buying 3,985.
Just make sure you dump it, dump it again, and cash out at 4,700 or 4,800.
The happy days humans dream of not only never existed, but are forever gone. Everything is about to become stringently serious.
Note
So, let's say that the intention of the MMs isn't to raid 4,000 because that's another 6% away, and we're short on time at this point.Then raiding 4,170 is really quite certainly on deck, but more or less has to happen this week.
The rally thesis would mean enormous candles in November and December to end the year.
The more time passes, the harder of a sell the theory is. But on the other hand, it's a more rational thesis than doom markets ending 2023.
Short of a natural, manmade, or Cosmic disaster, at least.
Note
Call was a little bit early in terms of timing, but definitely overall correct in terms of the quarterly PA, thus far.The question is, under the June low and the 4,200 mark have we bottomed?
It's important to note that JPM doesn't need price to trade to/at 4,000. Their puts will be worth equal to or greater than what they paid for them because of the early movement in their failure.
That combined with hedging and other considerations is why they don't lose money no matter what happens, really.
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