If we crash it will look like this.
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JHQTX and OPEX Window of Weakness
1. Vanna and Charm Flows gain strength
2. VIX Print for the month
3. Window of Weakness
Options and Vol are entering in a very fragile time when flows can be at their technical weakest.
When social media start speaking about goldilocks (economy goes not to hot, not to cold).
That could be this months OPEX (Options Expiry).
A slow grind higher into CPI is likely due to well supplied vol leading up to the event.
But CPI is likely to be a catalyst into VIX and OPEX prints.
My outlook is that anything above the 20D is a buyable dip right now.
If dealers Gamma Exposure suddenly moves negative before CPI and Vix Expiry I will be the first to clang the cow bell.
There are 3 big hedged equity funds I monitor from JPM and JHQTX is the smallest of the three, which means technical flows from this fund are the weakest of the monthly rolls.
Flows from JHEQX (largest fund) and JHQDX (middle fund) are stronger 20 days before expiration as Gamma becomes a bigger factor and IV that spikes from a weak VIX print into OPEX bleeds off into end of month expiry options like our HEFS.
Months that JHEQX and JHQDX pin the market to a certain expiry with supportive flows, JHQTX tends to be the runt of the litter because it always ends up coming in short.
The weakest point in markets will be Feb 15th - 28th.
The next weak spot would be May 17 - 19
1. Vanna and Charm Flows gain strength
2. VIX Print for the month
3. Window of Weakness
Options and Vol are entering in a very fragile time when flows can be at their technical weakest.
When social media start speaking about goldilocks (economy goes not to hot, not to cold).
That could be this months OPEX (Options Expiry).
A slow grind higher into CPI is likely due to well supplied vol leading up to the event.
But CPI is likely to be a catalyst into VIX and OPEX prints.
My outlook is that anything above the 20D is a buyable dip right now.
If dealers Gamma Exposure suddenly moves negative before CPI and Vix Expiry I will be the first to clang the cow bell.
There are 3 big hedged equity funds I monitor from JPM and JHQTX is the smallest of the three, which means technical flows from this fund are the weakest of the monthly rolls.
Flows from JHEQX (largest fund) and JHQDX (middle fund) are stronger 20 days before expiration as Gamma becomes a bigger factor and IV that spikes from a weak VIX print into OPEX bleeds off into end of month expiry options like our HEFS.
Months that JHEQX and JHQDX pin the market to a certain expiry with supportive flows, JHQTX tends to be the runt of the litter because it always ends up coming in short.
The weakest point in markets will be Feb 15th - 28th.
The next weak spot would be May 17 - 19
Nota
Covid Crash, Exchange Holidays and VIX/OPEX Window of weakness in 2020Nota
In this idea about front running FOMC I was wrong about a retest at the crossover of moving averages
But if you looked at the chart I added for DXY range it was spot on. DXY always does a fake out of range before the breakout.
Interesting to note that DXY has not consolidated and moved higher since Sept 2022. Keep an eye on DXY this week. It may sharpen the outlook for Feb CPI.
Nota
Not so strong of Vanna and Charm flows this week. It goes to show you how JHQTX does not have as support flows on expiration month as the two bigger funds.
Macro headwinds including the debate over AI and GOOGL stumbling into the arena. Yields Rising and a big ES player enters the arena for the next CPI print / Vixperation.
Carl Icahn bought a very bearish 4050 Put on ES. 24k contracts is a huge directional bias. I'm going to create an ES indicator to track the strategies delta and gamma effects into expiration. Pretty sure it will be the March 17 expiration but don't quote me on that because I have not seen the trade yet.
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