SPX ES Futures - A Great Deal of Caution Is Advised
Diupdate
It can be said that it's no surprise whatsoever that Jackson Hole was used so that options sellers could make various positions expire worthless, since it occurs on a Friday and was widely expected to be a high volatility day.
Although indexes closed with sub-1% moves, the intraday range was actually very significant.
Perhaps with Wednesday's apparent bounce and Friday's recovery, and the VIX trading at a 15-handle again, traders have been told to become bullish again because "new bull market."
Yet when we look at the ES monthly, we see that price action has already taken out the July low.
And we see from the Weekly that the weekly bounce simply swept into the wicks by a half handle before retracing upwards of 3%.
The Nasdaq swept even higher, into the week of August 7's wicks:
And the Dow is actually just really, really bearish:
The biggest problem bulls face heading into the end of September and the end of Q3 is the situation in Mainland China with Xi Jinping and the Chinese Communist Party he has still yet to throw away.
While many people may still feel that a sub-10% move on ES futures for the month of August, that will take out the July low circa-4,100, is a dream too good to come true with four days remaining...
Consider that China's Hang Seng Tech Index, in an economy where every single company is a de facto state-run enterprise that must report to the CCP in every way, has an almost 17% range this month while dealing with a similar numerical value to the SPX:
What hangs over the head of all of humanity is the 24-year persecution of Falun Dafa's 100 million practitioners by the CCP under former Chairman Jiang Zemin (it died) starting July 20, 1999.
In order to go to places like Tsinghua and Shanghai and do business as a foreigner, one has had to "transfuse blood" and swear vows to the Red Regime and the Jiang Faction, and this has formed significant skeletons in the closet of many of the companies that support the indexes.
If you don't believe it. Just go look up the Neil Heywood saga, or look at Canadian establishment journalist Sam Cooper's book "Wilful Blindness: How A Network Of Narcos, Tycoons And Chinese Communist Party Agents Infiltrated The West" and take a calloused look at reality.
The start of August has marked a bearish shift in market structure. And although there are significant fractals that show a retrace to the highs is actually very realistic, the reality is that with how price action has played out, every bounce has occurred to rape bears and trap bulls.
And this means that if there is to be a bounce, it's likely in Q4, which means there's another month of megadoom ahead.
JP Morgan's big fund has been long puts from 4,225 since the end of June, and those puts have been significantly under water this entire time.
JPM doesn't lose money and is hedged, of course, but the reality is that because of time decay, price must now trade significantly below 4,225 for those puts to even break even, the 4,665 calls to finally expire worthless, and the 3,550 puts they sold to a client to even have a remote chance of mitigating their losses.
The truth is that the target, since indexes took the July low and have not truly bounced, is the June low.
For ES SPX futes, this means 4,178, and more likely, a raid on the 4,100 big figure to complete August.
There's only four trading days left, and this amount of volatility will be significant. But at the same time, it's only a -5.34% week from where we closed on Friday.
A quarter-handle raid on the low will result in a sub-10% loss this month for the SPX.
Compare that to the Hang Seng Tech and tell me how unrealistic reality is at a time that all of humanity is in great danger.
So, what are the news drivers? On Monday, there's nothing in the economic calendar, but Tuesday is JOLTS, Wednesday is ADP Non-farm and GDP, Thursday, the 31st is PCE and Unemployment, and Friday, September 1, is the most volatile day of the month, Non-farm Payroll.
Anyways, bulls, buying the dip is cool, but your calls better expire January of 2024. Anything less, and you're probably just donating money to some Hedgie's son's fraternity fund.
Although indexes closed with sub-1% moves, the intraday range was actually very significant.
Perhaps with Wednesday's apparent bounce and Friday's recovery, and the VIX trading at a 15-handle again, traders have been told to become bullish again because "new bull market."
Yet when we look at the ES monthly, we see that price action has already taken out the July low.
And we see from the Weekly that the weekly bounce simply swept into the wicks by a half handle before retracing upwards of 3%.
The Nasdaq swept even higher, into the week of August 7's wicks:
And the Dow is actually just really, really bearish:
The biggest problem bulls face heading into the end of September and the end of Q3 is the situation in Mainland China with Xi Jinping and the Chinese Communist Party he has still yet to throw away.
While many people may still feel that a sub-10% move on ES futures for the month of August, that will take out the July low circa-4,100, is a dream too good to come true with four days remaining...
Consider that China's Hang Seng Tech Index, in an economy where every single company is a de facto state-run enterprise that must report to the CCP in every way, has an almost 17% range this month while dealing with a similar numerical value to the SPX:
What hangs over the head of all of humanity is the 24-year persecution of Falun Dafa's 100 million practitioners by the CCP under former Chairman Jiang Zemin (it died) starting July 20, 1999.
In order to go to places like Tsinghua and Shanghai and do business as a foreigner, one has had to "transfuse blood" and swear vows to the Red Regime and the Jiang Faction, and this has formed significant skeletons in the closet of many of the companies that support the indexes.
If you don't believe it. Just go look up the Neil Heywood saga, or look at Canadian establishment journalist Sam Cooper's book "Wilful Blindness: How A Network Of Narcos, Tycoons And Chinese Communist Party Agents Infiltrated The West" and take a calloused look at reality.
The start of August has marked a bearish shift in market structure. And although there are significant fractals that show a retrace to the highs is actually very realistic, the reality is that with how price action has played out, every bounce has occurred to rape bears and trap bulls.
And this means that if there is to be a bounce, it's likely in Q4, which means there's another month of megadoom ahead.
JP Morgan's big fund has been long puts from 4,225 since the end of June, and those puts have been significantly under water this entire time.
JPM doesn't lose money and is hedged, of course, but the reality is that because of time decay, price must now trade significantly below 4,225 for those puts to even break even, the 4,665 calls to finally expire worthless, and the 3,550 puts they sold to a client to even have a remote chance of mitigating their losses.
The truth is that the target, since indexes took the July low and have not truly bounced, is the June low.
For ES SPX futes, this means 4,178, and more likely, a raid on the 4,100 big figure to complete August.
There's only four trading days left, and this amount of volatility will be significant. But at the same time, it's only a -5.34% week from where we closed on Friday.
A quarter-handle raid on the low will result in a sub-10% loss this month for the SPX.
Compare that to the Hang Seng Tech and tell me how unrealistic reality is at a time that all of humanity is in great danger.
So, what are the news drivers? On Monday, there's nothing in the economic calendar, but Tuesday is JOLTS, Wednesday is ADP Non-farm and GDP, Thursday, the 31st is PCE and Unemployment, and Friday, September 1, is the most volatile day of the month, Non-farm Payroll.
Anyways, bulls, buying the dip is cool, but your calls better expire January of 2024. Anything less, and you're probably just donating money to some Hedgie's son's fraternity fund.
Catatan
One area of concern on ES futures is this untraded gap circa 4,500.However, trading to this at the end of the month would make for a pretty bullish candle, or cause something in the last three days to be severely bearish in a reversal.
And thus, it may simply be that this area is retained for a move in Q4.
Catatan
At this point, we can safely surmise the market is not likely to dump 10% in the next two days with this breaker above 4,500.4,500 as an optimal short entry may truly actually be very good.
This would make 4,100 and below the target for September, and this sort of not-super-bearish pivot formation indicates that a Q4 rally may really be on deck.
Catatan
Although it's the month end candle print for futures and SPY, that's a pretty bearish pattern.Even if Nonfarm Payroll takes out the daily high tomorrow with the Labour Day weekend on deck, if you're believing that it's a new bull market, I can only strongly encourage you hedge your risk.
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