Nobody cared about AMD earnings. Nobody cared about SpaceX either.
Both were non-events. The only thing that moved this market was the S&P crossing 7,700, and I want to explain why that single level mattered more than every headline this week combined.
We had been trading inside a very finite range with 7511 sitting at the center of it. When price stays in one neighborhood that long, an enormous ball of risk builds up in the options, rolled forward day after day, and a lot of it in zero DTE contracts.
The second we crossed out of that range into uncharted turf, the entire professional world had to buy S&P futures. Servers turned on and we went parabolic.
I recorded tonight’s video on what that did underneath the surface, because the structure is the story now, not the level.
Here’s what I cover:
→ The skew reading that just hit the lowest number I have seen in recent history, and the plain English version of what that means for your positions
→ Why the at-the-money calls are trading at a 13 vol while the ones further out are more expensive, which is backwards
→ The volume figure in the SPX today that I still can’t quite believe, on a session that felt completely docile
→ Why calls are now trading nearly one for one against puts in a product where puts historically trade at twice the volume
→ What happens over the next two days as these hedges start coming off, and the size of move you should actually be planning for
→ Why I expect bonds to sell back off from here, and the reason has nothing to do with the Fed
I want to be clear about one thing, because people take this wrong. None of this is a crash call.
What you are going to get is fast, disconnected, broken-feeling trade into Friday and early next week. Not 10 point moves. Think 50 or 70.
Hands and feet inside the vehicle at all times.
