Friday
June 19, 2015
1-855-RWT-0008
Prepared by the good people at Random Walk, LLC. (and Scott)
Great Morning!
Closing Prices From Yesterday
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Today’s Number(s)
Yesterday and Today
Yesterday
The markets opened up 7 E-mini points after being down 4 in the night session. From that 7 point platform they took off like a rocket with the stage 1 booster rocket dropping at +16 and stage 2 rocket dropping off at +22. They managed to make it up over 29 points at the highs only to settle into an orbit at +25, or about +200 Dow points on the day.
At the end of they day futures pulled back modestly on new rumors about Greece, but even impending doom in that country could not destroy the strength the markets were feeling.
Analysts were claiming, and this time it was probably too obvious for even them to be mistaken, that the run higher was a result of the Fed keeping interest rates unchanged. Another contributing factor that would require one too many layers of the onion to be peeled back for the average analyst to see was today’s triple-witching expiration.
One needs to keep in mind that on the Thursday prior to May’s standard expiration the SPX was up over 21 points as well. Why? It seems the basket traders (program trading) are tired of buying the highs of the day on the open Friday morning, so they just run in and do it throughout the day on Thursday.
I think the triple-witching expiration likely had as much to do with yesterday’s dramatic climb as Yellen keeping interest rates unchanged. Recall that on Wednesday the markets closed unchanged for the E-minis despite having had two hours to digest Yellen’s news. If her news was as bullish as people think, some real bright guys on Wall Street would have bought the market up Wednesday.
TODAY
We do not have any economic numbers out today for people to talk about all day long, so instead the majority of the discussion on CNBC will likely be conjecture on what is going to happen with Greece. There will be enough negativity and worry created by this āgarbageā and waste of time to keep fear fresh in people’s mind. For this reason I doubt very much we will see any real follow through today, and will probably be stagnant to slightly lower going into the weekend.
One must remember the surprise -200 point open we had last Monday on Greek news, and people will have that fresh in their minds. This is why we came in short deltas in the POT class and will reverse them by the end of the day. I suspect we will blast off on Monday to the upside when after the weekend the world is still in tact.
We have a slight long delta in the front month and huge short deltas in the back month. This means we synthetically have on a āJelly Rollā, though not in the traditional sense of long v short synthetics.
The moment the bell rings on the open the long call spreads I bought on the close will expire and we will have back month short deltas of about -100. This will be the first time our delta is net short in a very long time, but it is just for the day. We will flatten or get long by the close.
Contract the office at 1- 855 ā RWT ā 0008 for more details.
Too True To Be Funny
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