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A pretty boring day, with some games being played ahead of tomorrow’s options expiration. Gamma levels should drop significantly at tomorrow’s open, removing the “buy-the-dip” activity we’ve seen around 5,980. The “sell-the-rip” pattern near 5,920 is also likely to disappear.
After we get through tomorrow, the entire options landscape is skewed to positive delta, and I’d think these positions get unwound at some point. This is nearly the exact opposite of where we were heading into April opex, when the entire chart was basically red.
The S&P 500 bottomed on Monday, April 21, the day after the April Opex. We know that OPEX can often serve as a turning point for the market, so I would not be surprised to see a change in trend here.
Tomorrow, we get that import/export data that I have been eagerly awaiting. For now, the market has escaped inflation in the CPI and PPI; we will see if it can escape higher import prices. Twenty years of data suggest that when prices paid indexes in the Philly and Empire State surveys rise, import prices rise, too.
We saw some further strengthening in the Taiwan New Dollar today, and honestly, the chart would almost suggest that it strengthens further. One can see it has broken that minor short-term uptrend.
It looks the same for the Korean Won. Both of these countries, of course, are huge exporters of semiconductors and electronics.
While I have an idea as to why these currencies are strengthening, based on what I have read, it is primarily due to big life insurance companies bringing money home. It’s the why now. We have not heard anything about the status of chip tariffs, and the timing of these FX moves seems to align closely with the closing of the public comment period on Section 232 for semis. Otherwise, this price action is odd if tariffs on semis aren’t coming soon.
-Mike
TERMS by Chatgpt
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Gamma Levels: Refers to the rate of change in an option’s delta relative to the underlying security’s price. When gamma levels drop significantly, it means there’s less sensitivity in the options market, reducing hedging activity from market makers.
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Buy-the-dip: A trading strategy that involves buying an asset after a decline in price, expecting it to rebound.
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Sell-the-rip: Opposite of buy-the-dip, this is a strategy where traders sell or short-sell assets after prices rise, anticipating a pullback.
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Positive Delta: Indicates that market positioning is net bullish, suggesting that option positions overall benefit from an increase in the underlying asset price.
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OPEX (Options Expiration): The date when an options contract expires, often associated with increased volatility or market turning points as traders adjust positions.
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Philly and Empire State Surveys: Regional Federal Reserve surveys that measure manufacturing activity, including components such as “prices paid,” which indicate inflationary pressures.
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Taiwan New Dollar and Korean Won: Currencies of Taiwan and South Korea, significant due to their connection to major technology and semiconductor exports.
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Section 232: Refers to a U.S. trade law allowing tariffs or trade actions based on national security considerations.
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FX Moves: Refers to movements in foreign exchange (currency) markets.
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Import/Export Data: Economic reports detailing prices and volumes of imported and exported goods, influencing market expectations about inflation and economic health.
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Chip Tariffs: Import taxes specifically targeted at semiconductor products, potentially influencing international trade and currency flows.
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
Subscribe to receive this FREE daily commentary directly in your email
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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Mott Capital's Market Chronicles September 12, 2025 2:14 PM