A Volatile End To A Volatile Week, As Traders, Push The Markets Around
It has become clear that brokers-dealers need to get long the S&P 500 at 3000 and short at 3050, for now at least.

A Volatile End To A Volatile Week, As Traders, Push The Markets Around

MAY 29, 2020

STOCKS – NONE

MACRO – SPY,

MIKE’S READING THE MARKET PREMIUM CONTENT $35/MONTH OR $300/YR– 

It has become rather clear to me this week, that the large volatility swings we have witnessed are merely driven by broker-dealers hedging their books against their open options positions. It obvious, they need to get long futures around the 3,000 level in the S&P 500 and short futures around the 3,050 level. It is that easy. This is a topic that we have discussed every day in my subscription area for weeks now, and it was much more apparent this week than in weeks past, which is why I’m bringing it up here.  All one needs to do is look at the open interest levels in the S&P 500 to see. Premium content – Dealers Still Supporting The Market

s&P 500, spx

It is not a coincidence that all week the S&P 500 could not close above 3,050, despite several late-day attempts, and came roaring back when the SPX got to or below 3,000. It is just that simple; there is nothing more too. 

SPX, sp500

Again, if you are wondering why I have never discussed this before, well, because it is a difficult topic to grasp, and it is more complex then the way it is described above. Many of the members took a few weeks to get caught up to speed, but for the most part, they all get it now. 

For now, this all continues to be just a part of the large broader momentum trade that has been taking place in the markets. 

That is all for a Friday. 

-Mike

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