07-20-2021, 08:16 PM
Why NEWS is misleading - July 20th, What really happened.
<!-- SC_OFF --><div class="md"><p>TL;DR - <strong>SPY to pin near $432.50</strong> Wednesday.</p> <p>I have time stamped all my calls and before July 20th I time stamped that SPY would pin to $426. And by close of July 20th I stated that SPY would battle over this pinning.</p> <p>But, and I have the historical calculations, SPY was set to be pretty volatile around $427 and $428 so that is more likely where the bounce came from, pushing options holders expiring tomorrow to hedge by buying.</p> <p>So what happened?</p> <p>In the <strong>NEWS</strong> literally Monday was nothing but "market sells off on Covid fears and inflation."</p> <p><strong><em>You can't make this up</em></strong></p> <p>Today: "Inflation temporary, market recovers."</p> <p>The NEWS simply doesn't know anything and now I'm fully convinced they just invent stories about why things happen.</p> <p><strong><em>What really happened</em></strong> is that $426 on large open interest was gamma positive and price seeks higher gamma. Price pushed toward this nearest "island of stability" aka support level and pinned there on Monday until expiration.</p> <p>Today, there are few islands of stability and since $426 was already very low considering over all market sentiment, influx of buying at cheaper near-term prices, has set off a typical buying cycle for negative gamma aligned markets.</p> <p>In truth, it could have been pushed lower on negative openings to somewhere around $421, but then you have to say that people expect the SPY to be worth $421 by Wednesday. Does anyone really believe that?</p> <p>No.</p> <p>So the natural direction was bullish.</p> <p>The next island of stability in the near term is forming around $432 - $433.</p> <p>The price will seek those and by tomorrow might even become a positive gamma pinning point.</p> <p><strong>THIS IS WHAT'S HAPPENING</strong>.</p> <p>Not some B***S*** about Delta Variants and Inflation fears.</p> <p>Who in their right mind worries about inflation and pandemics on Monday and then forgets it on Tuesday?</p> <p>GET F***ing real.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/DarthTrader357"> /u/DarthTrader357 </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/oo76sz/why_news_is_misleading_july_20th_what_really/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/oo76sz/why_news_is_misleading_july_20th_what_really/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>TL;DR - <strong>SPY to pin near $432.50</strong> Wednesday.</p> <p>I have time stamped all my calls and before July 20th I time stamped that SPY would pin to $426. And by close of July 20th I stated that SPY would battle over this pinning.</p> <p>But, and I have the historical calculations, SPY was set to be pretty volatile around $427 and $428 so that is more likely where the bounce came from, pushing options holders expiring tomorrow to hedge by buying.</p> <p>So what happened?</p> <p>In the <strong>NEWS</strong> literally Monday was nothing but "market sells off on Covid fears and inflation."</p> <p><strong><em>You can't make this up</em></strong></p> <p>Today: "Inflation temporary, market recovers."</p> <p>The NEWS simply doesn't know anything and now I'm fully convinced they just invent stories about why things happen.</p> <p><strong><em>What really happened</em></strong> is that $426 on large open interest was gamma positive and price seeks higher gamma. Price pushed toward this nearest "island of stability" aka support level and pinned there on Monday until expiration.</p> <p>Today, there are few islands of stability and since $426 was already very low considering over all market sentiment, influx of buying at cheaper near-term prices, has set off a typical buying cycle for negative gamma aligned markets.</p> <p>In truth, it could have been pushed lower on negative openings to somewhere around $421, but then you have to say that people expect the SPY to be worth $421 by Wednesday. Does anyone really believe that?</p> <p>No.</p> <p>So the natural direction was bullish.</p> <p>The next island of stability in the near term is forming around $432 - $433.</p> <p>The price will seek those and by tomorrow might even become a positive gamma pinning point.</p> <p><strong>THIS IS WHAT'S HAPPENING</strong>.</p> <p>Not some B***S*** about Delta Variants and Inflation fears.</p> <p>Who in their right mind worries about inflation and pandemics on Monday and then forgets it on Tuesday?</p> <p>GET F***ing real.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/DarthTrader357"> /u/DarthTrader357 </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/oo76sz/why_news_is_misleading_july_20th_what_really/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/oo76sz/why_news_is_misleading_july_20th_what_really/">[comments]</a></span>Kind Regards R