SPY / ES / SPX - Market Structure & PostureWeekly Engulfing Charts are clearly not a preferred look for the Buy Side and those
riding the Bullish Tilt-O-Whirl - Bodies are being flung everywhere.
The Dollar is doing its thing, it ran to our PO at 107.65 with a 107.67 print and
reversed yet again. it's been a pattern as the EuroDollar continues the ties that
bind, Dollar shortages create demand until the Dollar is dethroned.
Sell Side has lifted the CBOE P/C to (.82).
Please note after the brutal June 17th 4X - we reversed very hard the following Monday.
For Roll out the Options Curve - it's muted Frankly. Traders took their Bags, packed up, and headed
off to parts unknown.
That said... Bulls may have a chance to hold and to have... "may" - as horrific as it looks,
Wall Street may surprise with a short Countertrend to shake off the Late chasers. Again it
is "may" not will - It is, however, exactly what I would do.
There simply isn't enough Capital to transfer in the leveraged deep end of the Pool. It
seems there is another attraction elsewhere for now - unaware of any real contests outside
of the Lounge, but the lizards are somewhere, for certain.
Sentiment everywhere is pure doom, gloom, and kaboom. Understandably so after Teton
Jerry and CPI - it's been a brutal month for Buyers. Wrecked and Raked at every turn.
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Here's O/I for SPY into Month End by Expiry:
SPY 9/19 Exp - Very Low Participation
SPY 9/21 Exp - Moderate Participation (FOMC) / VIX Roll/Settle Complete 4 PN EST on 9/20)
SPY 9/23 Exp - 360 Participation @ ~70K
SPY 9/26 Exp - Very Low Participation
SPY 9/28 Exp - Very Low Participation
SPY 9/30 Exp - Very High Participation @ 390 @ 102K / 385 @ 134K / 370 @ 143K / 350 @ 120K
October Monthly Expiry needs those traveling to parts unknown, requiring some time to re-engage.
It is important to note the early & largest entry for October was 372 Puts.
On to the Chart
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Charts are simple messy, mixed, and have the appearance of that "double bottom" in trade
and quickly... which may be why it doesn't happen.
The KEY Line in the Sand is not the Lows, it is the dip in below 3588 - that is a number
so please commit it to memory, breaking it.. assure a return to far lower lows, but
over time.
We completed Day 21 of this downside Crush from Wall Street. The Financial Media has been
abuzz about multiple contractions after spending weeks supporting "Pivot Chatter" and, surprise,
"Multiple Expansion" - remarkable anyone listens.
For "Time" we need a breather... soon. it's important to remember the ES defended the
FHWB - all-time highs to lows @ 3849.50 @ 3853.
Structurally - it looks bleak. I mean look at it... it's terrible. Longer Term, even worse - but
that is for later, for now, it's interesting... and it is quite possible we get a larger counter-trend
Squeeze developing this week. A very nasty one... quite possibly.
RSI STO supports its development near term. Best to be agile and not be caught offsides, as
fear is grinding lower - currently @ 36 as the September Vix settles on - Powell the 21st.
Jerry's arrival Wednesday with 75BPS most likely, as 100BPS I was looking for may be split to
the November FOMC as it appears to be 75BPS as well. The Ministry of Financial Truth was
out early in the week touting100 only to hear JPM quash that with "The Fed isn't going to raise
100BPS, but 75BPS".
We will see, I'm non-plussed with Forward Rates trading @ 4.5%. Yields have gone vertical... never
a good thing, not ever. Institutions apparently now consider the 1 & 2-year pristine collateral.
I had to laugh when Bloomberg touted - "Yes but the 30/90 Day are not inverted~!" Oh, Hooray
for this - perhaps it's the fact Yellen curtailed issuance to non-existent and the Market for the
very short end of the Curve... is not trading any real liquidity.
Something is going to give - but in a most unusual way. Yes, valuations will be corrected further.
Of this there is little doubt, it's how it occurs that traders seize.
Wall Street enjoys a nice lift ahead of EPS Season... with Powell stuck squarely in the middle.
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