Posted by DigiNomad on 18th of Apr 2024 at 05:31 pm
Any truths that exist will morph as the dominance of daily
options continues to grow at a blistering pace. Today and tomorrow
are not really comparable to a year ago and we might as well be in
a completely different world from 5 years ago. Options really
have become THE dominant force in markets...and now we're dealing
with daily expirations...but it's still a relatively new phenomenon
so we shouldn't think we know all the risks yet. There will be
unexpected events and growing pains because of the internal changes
in market structure and drivers.
I think of it in terms of notional value (probably because
I'm an options trader) and it's mind-blowing. Think about how
a bank makes a loan and it increases the money supply (you don't
need the Fed or Treasury to increase money supply - bank loans
create money). Now take the options market and think about
participants creating almost unlimited notional positions on both
sides of an underlying, but many many times larger notional value
than the value of the underlying itself. The notional value
of the options market is much much larger than the combined value
of the underlying assets. Most popular assets can now be levered
via ETF's where traders create the leverage with complex option
positions. What could possibly go wrong?
Also noted in the last several years the explosion of Paper
Precious Metal, like 400% growth. "They" use these to limit
to price of physical metals, and I have assumed for quite a while,
that at some point they will lose control, and then gold could see
$5000 and silver to $45 or $50 and that is just the near time, and
then as always a blow off top and then a mutli-year correction.
What sayeth y'all?
Schwab is buying out TD Ameritrade, and so Thinkorswim is
changing hands yet again, I hope they don't gut it as being a too
powerful tool for the plebs to use.
Matt or Steve, your thoughts.... is this a legitimate wedge and
should we expect a MACD divergence to increase our confidence, or
lack of MACD-D would negate the wedge?
SPX/SPY is getting quite compressed (steep wedge) and there is
some divergence now on 60 minute chart but we have yet to see a
break in structure (still lower highs). Also, noteworthy is
the SPX daily RSI is now in an oversold region which rarely fails
to provide some type of bounce. Also have 5 days down (could
extend but odds favoring a bounce soon just need a trigger).
OPEX tomorrow.
we both would like to see that gap filled on the SPX charts we
have shown, honestly a gap down to fill that gap then recovered
would probably be a good trade low for now, but I want to fill that
gap. about 27 points down on the cash SPX would fill that gap
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Any truths that exist will
CCI Divergence may trigger long on ES futures for mean reversion
Posted by DigiNomad on 18th of Apr 2024 at 05:31 pm
Any truths that exist will morph as the dominance of daily options continues to grow at a blistering pace. Today and tomorrow are not really comparable to a year ago and we might as well be in a completely different world from 5 years ago. Options really have become THE dominant force in markets...and now we're dealing with daily expirations...but it's still a relatively new phenomenon so we shouldn't think we know all the risks yet. There will be unexpected events and growing pains because of the internal changes in market structure and drivers.
I think of it in terms of notional value (probably because I'm an options trader) and it's mind-blowing. Think about how a bank makes a loan and it increases the money supply (you don't need the Fed or Treasury to increase money supply - bank loans create money). Now take the options market and think about participants creating almost unlimited notional positions on both sides of an underlying, but many many times larger notional value than the value of the underlying itself. The notional value of the options market is much much larger than the combined value of the underlying assets. Most popular assets can now be levered via ETF's where traders create the leverage with complex option positions. What could possibly go wrong?
Also noted in the last
Posted by steveo on 18th of Apr 2024 at 05:41 pm
Also noted in the last several years the explosion of Paper Precious Metal, like 400% growth. "They" use these to limit to price of physical metals, and I have assumed for quite a while, that at some point they will lose control, and then gold could see $5000 and silver to $45 or $50 and that is just the near time, and then as always a blow off top and then a mutli-year correction. What sayeth y'all?
Schwab is buying out TD Ameritrade, and so Thinkorswim is changing hands yet again, I hope they don't gut it as being a too powerful tool for the plebs to use.
Matt or Steve, your thoughts.... is this a legitimate wedge and should we expect a MACD divergence to increase our confidence, or lack of MACD-D would negate the wedge?
SPX/SPY is getting quite compressed
Posted by steve on 18th of Apr 2024 at 05:58 pm
SPX/SPY is getting quite compressed (steep wedge) and there is some divergence now on 60 minute chart but we have yet to see a break in structure (still lower highs). Also, noteworthy is the SPX daily RSI is now in an oversold region which rarely fails to provide some type of bounce. Also have 5 days down (could extend but odds favoring a bounce soon just need a trigger). OPEX tomorrow.
we both would like to
Posted by matt on 18th of Apr 2024 at 08:09 pm
we both would like to see that gap filled on the SPX charts we have shown, honestly a gap down to fill that gap then recovered would probably be a good trade low for now, but I want to fill that gap. about 27 points down on the cash SPX would fill that gap