Found this in an article from last year. "Stocks finished
the day lower, which hasn’t happened much recently, in a sudden
turn mid-day. There was no good explanation for the sudden turn,
but I think if you have been reading me for any length of time,
then you know that today was Vix options expiration, and there were
a very large amount of negative flows suppressing the VIX the past
few days/weeks, and now those are gone.
With flows of December opex and now Vixperation behind, options
flows that have supported the market are officially gone. I have
little doubt in mind that these flows have driven this final leg of
the market higher since the Fed meeting last week. The rest of the
already-known move was based on a negative gamma positioning built
in October and was violently unwound, which then kicked off
systematic flows." ~ Mott Capital Management
Posted by DigiNomad on 16th of Jul 2024 at 03:32 pm
Mott Capital is wishing you would have found this. Haha. No one,
and I mean no one, back then really understood the power of the
fiscal hammer they brought down and then the QRA shenanigans were
just a spark next to the rocket fuel - the power of the response
even caught the Fed by surprise. Predictions are difficult, to the
point of impossibility, with the unique set of circumstances like
we've encountered over the last couple of years. If we ever
deficit spend at 7% of GDP with a hot economy, flood the
workforce with cheap, undocumented laborers and massively shift the
duration of our borrowing (we went from roughly 80 long term 20
short term to 20 long term 80 short term in a blink of an eye) then
I think we will know what to expect next, next time. It's
obvious now, but it wasn't at first.
And this completely leaves out the massive effects
derivatives have had. Watch out if the degens ever decide to
take a break, probably because of market weakness. It is likely to
go from standard weak to REALLY WEAK quickly as the calls dissapear
from the equation.
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Found this in an article
VIX
Posted by EdZ on 16th of Jul 2024 at 03:11 pm
Found this in an article from last year. "Stocks finished the day lower, which hasn’t happened much recently, in a sudden turn mid-day. There was no good explanation for the sudden turn, but I think if you have been reading me for any length of time, then you know that today was Vix options expiration, and there were a very large amount of negative flows suppressing the VIX the past few days/weeks, and now those are gone.
With flows of December opex and now Vixperation behind, options flows that have supported the market are officially gone. I have little doubt in mind that these flows have driven this final leg of the market higher since the Fed meeting last week. The rest of the already-known move was based on a negative gamma positioning built in October and was violently unwound, which then kicked off systematic flows." ~ Mott Capital Management
Mott Capital is wishing you
Posted by DigiNomad on 16th of Jul 2024 at 03:32 pm
Mott Capital is wishing you would have found this. Haha. No one, and I mean no one, back then really understood the power of the fiscal hammer they brought down and then the QRA shenanigans were just a spark next to the rocket fuel - the power of the response even caught the Fed by surprise. Predictions are difficult, to the point of impossibility, with the unique set of circumstances like we've encountered over the last couple of years. If we ever deficit spend at 7% of GDP with a hot economy, flood the workforce with cheap, undocumented laborers and massively shift the duration of our borrowing (we went from roughly 80 long term 20 short term to 20 long term 80 short term in a blink of an eye) then I think we will know what to expect next, next time. It's obvious now, but it wasn't at first.
And this completely leaves out the massive effects derivatives have had. Watch out if the degens ever decide to take a break, probably because of market weakness. It is likely to go from standard weak to REALLY WEAK quickly as the calls dissapear from the equation.