Wonder no more why “Stock Bellies” go up / down, putting in all kinds of
reversals in the NYSE session … last week saw a day where we had a
“Quintuple” reversal in the “”Spoos”, something I’ve never seen … so who’s
causing this? … sure as Hell ain’t Ma & Pa from Des Moines trading their
retirement accounts … the amount of money that panics, both FOMO up and
panic selling down is staggering in scope … tens of billions in notional value
at the drop of a hat.
Round up the usual suspects for some 0DTE “fun & games”, only it’s not what
you’ve come to think … it’s not the scumbag Wall Street banks who are the
cause, they are the recipients of the “Con”, and are being forced to do what they
don’t really want to do by very large hedge funds, and maybe the “Plunge
Protection Team” [PPT] run by the FEDS New York desk … and they have tens,
if not hundreds of billions in AUM to back them up and give them plenty of
ammunition.
A big fund comes in and does a very large 0DTE CALL order in the “Spoos” that
expires in 4 - 5 hours … they do a block trade where they BUY 0DTE OTM
[out-of-the money] CALLS … a Vampire Squid trader last week says he saw the
largest 0DTE CALL trade he’s ever seen … according to SPOTGAMMA, a 25,000
CALL ORDER crossed the tape, slightly OTM … whoever did it, paid
approximately $5.5 million in premium … within seconds / minutes the “Spoos”
started rallying cuz the dealer bank(s) that sold the CALLS got delta & gamma
exposure “bigly & yuge” if the “Spoos” rally … and they did … that set off an
avalanche of buying that took the “Spoo” UP some 30 index points, and it took
the calls UP by approximately 500% … did whoever that made this trade then
start to take profits? … NOPE, they didn’t care! … instead, they unleashed a
“Shitstorm Hurricane” of PUT buying, that then took the “Spoos” DOWN 40
index points within an hour or two, to a new low for the day.
To a very large hedge fund, with AUM of billions upon billion under management,
whatever they paid for the premiums on the calls and puts is “Chump change”
… their REAL OBJECTIVE is to delay the selling to end of the day in order to trap
longs / buyers, OR they needed the dealer community to bid “Stonks” higher in
order to get off massive sell orders at higher prices … if you got plenty of billions
under your wings, what’s a few million in premium costs to get that? … let the
scumbag banks sweat the details! … and from what I’m told, whoever did these
options orders let them expire! … the bottom line here is an old one … “just like
scumbag bank LP’s run stops so they can fade them and get the volume they
need from Specs so they can get the best prices and highest liquidity on their
trades, and thus screw the public blind, the cards now get turned on them by very
large hedge funds that do the same thing to the banks who sell them the options
… and since large traders are tuned into places like SPOTGAMMA for analytics in
real time, once other large traders see this come across the tape and onto their
screens, they instinctively know what’s gonna happen next … if it’s CALL
BUYING, there’s gonna be a rally cuz dealers have to stay delta & gamma neutral
going up, and if it’s PUT BUYING dealers have to stay delta & gamma neutral
going down … which means, natch, their philosophy becomes “the Dukes know
something, let’s get in on this!” … and let the “Spoos” avalanche begin in
earnest!
This explains the one-way action straight up, straight down with ZERO
corrective activity, and what it means for markets in “Stock Bellies” is nothing
short of hedge fund manipulation to get the desired result … in other words,
“them with the gold makes the rules!” … and how do we know it’s not the FED
doing this shit? … we don’t!, cuz they’re exactly the same as a large hedge fund
… and wouldn’t that be something if the government is screwing the dealer
community, while at the same time with the other hand demanding their share
of the “skim” for POLS & Apparatchiks!
We don’t see this in FX, although there are times when options become the
“tail that wags the dog”, but it’s few and far between … FX is much bigger, and
the banks have cover from central banks, so the raids almost never make
headlines … although you do have to wonder about YEN activity from day to day
… and it’s why, if FX can exhibit normal VIX, and not die on the vine, you see
decent to excellent up / down activity with corrective activity … meaning of
course, you get more algorithm buy / sell signals no matter which side of the
market your trading.
Directly below, this week’s 20 Day Range MA’s for selected markets.
Onto the week … OUTTA HERE … “The future’s so bright I need 2 pairs of
sunglasses 😎😎, and my own Brinks armored truck” 💓!!
… Onward & Upward!!
-vegas
No comments:
Post a Comment