Review of last week:
- ES: With acceptance above 4810, we got to 4850+ moving from a balanced posture into a bullish one. We did this while the VIX curve went to the most complacency we’ve seen since before Covid. We have new all-time highs and key defense at 4800.
- NQ: With late acceptance above 16,955 we pushed above the expected 17,300 to end at 17,462. Shift from a balanced posture into a new bullish posture.
- RTY: We officially cleaned all of the poor structure from December with a tag back to the December VPOC at 1905. We began the week in a bearish posture and ended in a balancing one.
- CL: We began the week in balance, and we ended the week in balance. The auction still can’t get away from 72.75. It was an inside week. Still an inside month.
Expectations for the coming week:
- ES: New bullish posture for ES post OPEX. Highest concentration of option gamma is above at 5000 and that is the destination so long as we continue to hold above 4800.
- NQ: 18,500 the biggest magnet of option gamma above.
- We begin the week expecting higher prices. The auction will seek a price to balance.
- Caution if the auction returns back below 17,175 as this would make the end of week rally a “test” and set up a move back through the balancing range towards 16975 or even 16,400.
- RTY: We are now caught between two key prices: 1905 and 1977.50. The Russell is likely to retest one of these two prices this week.
- If we can accept above 1977.5 that can ultimately pave the way to push toward 2083 over the next several weeks.
- If we accept below 1905 then the door is open to push toward 1818 over the next several weeks. Expect chop between 1905-1977.5
- CL: Coming into the week, balanced and watching for a move from balance. 72.75 is the key pivot
- Look for tempo either above 74 to push toward 76.27+
- Below 71 to push for 70 and lower towards 68.
We are in earnings season with TSLA the biggest reporting stock this week. All eyes will start to look toward GDP data on Thursday and FOMC on the 31st.
VIX Curve: Past OPEX and now looking to FOMC on the 31st. We are as complacent as we’ve been since pre-Covid. This is cautious as that was during a “monetary” market and we are in a “Fiscal” one. The profile from the November low suggests that SPY is imbalanced to the upside and should continue to drift higher toward 500 unless we accept back below 472, in which case we can rebalance the profile back around 450.
Stay up to date with us via our Twitter posts this week.
Define your risk and trade well!