/u/TearRepresentative56's posts
VIX is flying as Nikkei drops 7% as the Yen surges. Many seeing Nasdaq down 6% in one day will be too scared to buy. The truth is, you need patience with this scenario. VIX is up at 80% to 43. This means MMs remove liquidity in the market. You need to wait for VIX to decline then buy.
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Inter meeting cuts not likely in truth. Inter meeting cuts happen when credit events, which are signalled by sharp rising credit default swaps. Not due to equity market collapse. Credit default swaps are still sleeping. So its unlikely IMO fed comes to try to cut rates here for now.
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NVDA tests the strong support of 100 today, but market makers keep the price above. If we can hold above that 105 put resistance, then we can see move to 110-115 as call delta builds on these 2 strikes.
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On SMCI plunge. Positioning was weak into earnings. Management are stupid though, wasted the opportunity of stock split bullishness. I dont know why they announced it at a time when market momentum was so poor. had they preannounced it even a few weeks ago ...
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Declines like this are often symmetric. Understand that. but the key is to watch the VIX as I mentioned in my earlier post. We have to wait and watch for VIX to unwind and roll over. When this happens, liquidity will pour back into the market, and will help for a strong and rapid recovery. Vix is ke
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Credit Spreads vs VIX. Complete lack of congruence. VIX is way too high relative to the actual systemic risk of what we are seeing in the market right now. Points to fact that markets will flourish as VIX comes down. You can track this yoruself on Tradingview
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Positioning has improved with the BOJ comments. Traders do target upside as skew shows. hwoever, as I mentioned, we can see more VIX crush in coming days, but pressure will remain into OPEX most LIKELY, although FED/BOJ can change that. As such, makes sense to trim positions at least a bit.
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Reminder to keep an eye on VIX. While VIX is rising, be cautious that sell off can continue. markets are very pressured. BUt as VIX does decline, liquidity wil increase to the market, and we will see a strong recovery. Just dont go too fast while Vix is rising. VIX up = lower liquidity = bearish
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Throughout July, we've seen IWM/SPY price action closely tied to the number of basis points of rate cuts being priced in by the market. After ydays press conference, market is pricing in 70bps of rate cuts this year. It will likely be just 50, but with this, we can expect IWM to perform.
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