Some thoughts to start the week:
A break from balance lower post the FOMC statement starts the week with equities on the lows of the month & quarter….as we head into the end of the month & quarter.
The selling was sufficient to start bringing in the put buyers across the VIX curve. This is actually what we need to find a bottom…a VIX inversion.
- ES, NQ, RTY ended the week away from composite balance higher. Expecting lower weekly prices, AND also looking for 5D value to migrate lower with price.
- Crude used the last week to balance inside the 84-94 range. Looking for “inside/out” trade from balance.
No doubt the media will trumpet the potential Government shutdown as a risk to markets. So, expect that to dominate the chatter. End of month & quarter can get wonkey. Don’t be surprised to see a kick save higher in the later part of the week after exploring lower early.
Where is there opportunity? See below 👇
VIX Curve: For the first time since March, we are seeing participation not just in 0DTE, but 30D and longer protection. To get to full inversion (where shorter dated VIX trades above longer dated VIX), it could easily coincide with a return to the most traded price of the year.
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