Potential_Project_48

Potential_Project_48 t1_jaeqzhf wrote

>Kinda surprisingly here is the fact that the VIX did not spike when we had that massive EOD sell off. It id recoil a little bit eod and bounced off its daily 20ema and closed under its daily 8ema… but with a sell off of that size I would have expected more bounce there. That could come tomorrow though. One thing I did note that besides Friday the PC ratio is very low this week on Spy.

I believe VIX didn't spike because the EOD sell-off was actually EOM pension rebalancing. Especially due to this months underperformance leading to a EOM sell. Therefore it was actual selling of shares, rather than the put hedge buying lately which has driven VIX up. Calm, systematic rebalancing.

Equities outperformed bonds this month, so EOM rebalancing saw funds dumping stock and buying bonds, pushing yields down and TLT up by end of day, with SPY down. Was one big trade.

Vanna and charm flows return tomorrow, so more VIX crush can be expected going forward, especially with no more news til CPI 2 weeks from now.

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Potential_Project_48 t1_ja9tz7p wrote

The issue I have with that, is how the market has been rallying since the October lows where the fed has raised over 100bps since then, and earnings are worse now than when they were in Q3. Market is not acting rational, and I don't expect it to until a recession smacks it in the face.

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Potential_Project_48 t1_ja9r6p6 wrote

If you zoom out a bit, we once again traded in the same range of a week ago since tuesday.

Looks more like it's basing/consolidating for another move higher, imo.

VIX literally in the 20s, there's no fear in this market. Was expecting more dump from the PCE surprise, but we got nothing.

The ingredient in all of last year's sell-offs was the momentum, as it's harder for the market to sell than to naturally drift higher. We need a catalyst to make it regain momentum, imo. Otherwise bears will probably drop the ball.

Reminds me of the December sell-off that stalled after losing momentum, everyone thought it was the start of the next leg down, instead it then moved sideways.

Edit: Very telling of sentiment here with bears downvoting my opinion 😂😂. Last time this happened in January, we mooned right afterwards 😂😂.

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Potential_Project_48 t1_j2f6wb7 wrote

Taxes, if that's not enough, the quarterly obligations suck ass for the interest charged on them if not paid...

Yeah, that's exactly why he predicts that. He even said the capitulation could be delayed until mid year as well to July. Reason being that vol sellers have completely pushed skew to the zero percentile, and they will continue to do so. Interest rate shocks take a long time to move through the system. Optimism can pick up and we even break out of the downward trendline as it seems that we are indeed getting a soft landing along with fed pause...

Until the unprecedented tightening hike effects finally burst through the pipeline, the shit hits the fan, and we enter a depression. Crash.

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Potential_Project_48 t1_j2f51ct wrote

We are going to pay HEAVY taxes this year, my friend. Sucks.

Anyways, I personally have been bullish on the technical side, that we have to hit at least 390 before we can begin the next leg down.

The issue of course, is when.

This last week, I think has been pure noise and driven primarily by MM flows and algos, next week will be interesting what happens when the big boys come back...

Cem Karsan has been absolutely on point all this year, and he says that until Jan 10, the market is to move sideways with a slight bearish directionality. After Jan 10, he said we are going to have a big bear market rally, and then the big one (crash) to come after OPEX sometime by March.

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