The S&P 500 futures are trading one percent below fair value currently.
The rather negative sentiment is rooted in concerns about economic and earnings growth potential, which have been stirred by a larger-than-expected rate hike by the Reserve Bank of Australia (50 basis points to 0.85%), weaker-than-expected factory orders in Germany, and Target cutting its Q2 operating margin rate guidance in conjunction with a plan to reduce excess inventory. That warning is expected to be a harbinger of profit warnings from other retailers in coming weeks.
The 10-year note yield is down 2.8 basis point to 3.01 percent, while Federal Funds Rate futures, which price in the path of short term rates set by the central bank, briefly touched 97.25 dollar.
Starting today several debt auctions will hit the markets (see chart below), which will put upward pressure on yields and test market absorbability in a QT environment.
Gamma Discussion
Implied dealer gamma decreased by 156MM to -563MM, which means option dealers/market makers need to sell more futures for every dollar the index retreats compared to the last days.
Yesterday investors started to accumulate put options again, as the increase in gamma at lower strikes and open interest data suggests.
Support can be identified at 4050 and 4000, while 4200 continues to be the most prominent resistance level.
We wish a successful trading session.
The rather negative sentiment is rooted in concerns about economic and earnings growth potential, which have been stirred by a larger-than-expected rate hike by the Reserve Bank of Australia (50 basis points to 0.85%), weaker-than-expected factory orders in Germany, and Target cutting its Q2 operating margin rate guidance in conjunction with a plan to reduce excess inventory. That warning is expected to be a harbinger of profit warnings from other retailers in coming weeks.
The 10-year note yield is down 2.8 basis point to 3.01 percent, while Federal Funds Rate futures, which price in the path of short term rates set by the central bank, briefly touched 97.25 dollar.
Starting today several debt auctions will hit the markets (see chart below), which will put upward pressure on yields and test market absorbability in a QT environment.
Gamma Discussion
Implied dealer gamma decreased by 156MM to -563MM, which means option dealers/market makers need to sell more futures for every dollar the index retreats compared to the last days.
Yesterday investors started to accumulate put options again, as the increase in gamma at lower strikes and open interest data suggests.
Support can be identified at 4050 and 4000, while 4200 continues to be the most prominent resistance level.
We wish a successful trading session.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.