Hello everyone, i just wanted to share my attempted at a semi informed DD.submitted by golfwangthesenuts to wallstreetbets [link] [comments]
The Dark Index (DIX) and Gamma Exposure (GEX) have been a subject of debate in the discussion room lately. So i thought that it would be a decent to inform and provide my personal opinion on their movements. If this has already been posted then I apologize.
Here is the squeeze metrics link. Here is also another great form of information, it is more helpful in my opinion. It highlights everything that you would need to know about dark pools.
I also want to note that we are in unprecedented times, the government is buying anything and everything trying to keep the market afloat. Trump is telling us that we will be reopened by two weeks ago. Oil is in complete free fall. Oh yeah and the pandemic. It turns out that the Brazilian president was wrong about his people being immune to the corona virus, which is scary because if it gets into the bat population in brazil it can mutate a lot faster. Any who, lets jump right in shall we?
The Dark Index (DIX)
The Dark Index is a dollar weighted measure of the dark pool indicator. It tracks the dark pool short volume for components of the S&P. It is interesting to note that short volume is actually investors buying the underlying stock. So a high percentage (over 45%) for DIX indicates that the market sentiment is stocks only go up and there is more short volume than non short. This is confusing yes but let me try to explain it.
I am the MM and I want to make money today so i tell my HFT algo to create a spread for SPCE. It looks at current market and says Bid: $16.95 and Ask: $17.07. The spread is $0.12. The MM is offering to sell at 17.07 and to buy at 16.95. An investor A puts in an order to buy a share of SPCE at 17.07 and investor B puts an order to sell at 16.95. The MM will place a SHORT sale at 17.07, sell the share of SPCE at 17.07 then instantly turn around and buy a share back at 16.95 from investor B to satisfy its short sale. That is why investors buying are considered short volume.
So as of right now the DIX is at 43.98%. This means that only 43.98% of daily volume is short volume, aka people buying. Historically a rising DIX (yes that is funny laugh it up) indicates market sentiment is bullish while visa versa means bearish. In this case we are looking to get to see a further deterioration of DIX into the 42% to 38% range to see a drastic pull down.
Here is the White Paper they provide for more info.
The DIX has been in a gradual decline ever since we had out totally normal totally legal run up 30% in the S&P. Now we can move on to GEX or the gamma exposure.
Gamma Exposure (GEX)
This has to do with MM delta hedging against calls and puts. This can introduce a put squeeze which is essentially a short squeeze.
If a MM sells you a SPY 240 5/1 (RIP) it will immediately calculate the delta of that option and hedge accordingly. So lets say your OTM SPY put that you were promised was going to print tendies only has a delta of .20 (20%) then the MM is going to go out and short 20 shares of SPY to hedge against the risk. The shorting of those 20 SPY shares pushes the price down further and what happens when it turns out you were wrong about your SPY 240 put? SPY sits at 283 and the delta of your put has gone down to .10 (10%) so the MM no longer needs to hold 20 shorted positions so it buys 10 to keep a delta neutral portfolio.
A low GEX means that the options market is more geared towards puts. Yes i said it all you gay bears, but it is still sitting at 1,264M. But only 6 days ago it was at 6,412M so this is a steep drop off over the past couple days. A high GEX implies that MMs are hedging with ITM or ATM options because they are expecting a change in the current price direction. A negative GEX, like we had starting on February 24th of -773M (aka the real start to the whole downtrend) implies a put squeeze of 773 million shares for every +1% movement in SPY. (The same idea applies to calls buy in the opposite fashion) This creates volatility in the market.
THIS IS NOT TA ON VIX, im not telling you to buy VIX calls every time it dips below 50 that is actually retarded, but.
It is not a coincidence that VIX jumped 46% the same day that GEX went negative. When GEX is high it insinuates low volatility, and when it is low is implies there will be. As a bearish outlook and put heaving options market drag SPY down it creates panic. There are also people buying share as it is falling thinking they are getting a sweet deal on SPY when it is at 275 because it is only a pandemic right? stocks only go up? All while this is going on MMs had been writing puts and delta hedging appropriately. So SPY go up intraday 2% that is about 1,546 million shares of SPY getting bought to adjust for delta changing on Feb 24th. Then we degenerates buy more puts because basically they are on sale and the cycle continues until the MM can manipulate the market enough to get their gamma exposure down to decrease volatility. Here is an article that explains why we were stuck in that 270 to 285 window for like two weeks.
On the day that VIX peaked at around 83, the GEX was at -2,170M and DIX was at 37.8%. I am not saying that a direct copy of those levels for GEX or DIX will duplicate a record high volatility day but it will help.
When VIX rose 20% from friday april 17th to tuesday april 21st, the most recent notable spike in volatility, DIX and GEX were both on the decline.
Why do I care about this information?
The DIX went from 51.2% to 44.9% in the days leading up to that volatility spike and decline in the S&P500. It seems that DIX is a precursor to what direction the S&P500 will move in the coming days. So it should be known that it is coming off two year record highs and the only time DIX reached those heights again was in admits the tiny crash in the beginning of 2016 and a fallout or correction in 2011.
On the other hand, GEX seems to mirror the S&P leading into down turns, it only leads the curve by a day or two. Please note that this part is just done by looking at the graph and seeing trends. But nonetheless, if you are a gay bear you want this index to keep falling.
Here are the GEX similarities between the last crash and now for the gay bears.
GEX trying to rise then getting swatted back down implying turbulent days are to come. Just from eye balling the day to day change in SPY and GEX it looks like GEX leads a little and SPY lags. So look for another big drop in GEX, hopefully even go negative.
GEX similar patterns before down turns
Also another thing to note, like i said high GEX usually leaded to a pivot in the current direction of the market in the following time period. GEX was at 6,412M and below are times it has been above or at that in the past two years.
It will be very interesting to see what dark liquidity things of this earnings week for tech and basically half of the S&P500.
GEX similarities between crashes at heights
Similarities between DIX in the first crash and now for the gay gay bears.
TLDR: If this trend continues then it is possible to have another leg down here soon. Be vigilant and check this index a few times a week just to see where the sentiment in dark pools is. Right now I am holding $SPY 6/19 and 9/18 puts.
Also this is not financial advice, I am just sharing my thinking behind my betting my money. If i missed anything or mis explained something then please let me know.
In I Can Make You Hot! I'm going to clue you in to all the tricks I've learned from a variety of experts and that I now use to live my own life. I want you to be the best you -- happy, attractive, shapely, interested, interesting, and most of all, smokin' HOT!The blurb promises that the experience of reading this book will be "like rooming with a supermodel and going on a diet together." Truly, only someone with Kelly Bensimon's tenuous grasp on reality would say this as if it were something exciting, rather than a scenario taken directly out of the third circle of hell.
Kelly is a great mother and is constantly instilling strong principals [sic] in her daughters. In my opinion, that's the essence of being HOT. Kelly is smokin'.And just like that, I Can Make You Hot! is knocked out of the running for First-Book-I've-Read-By-A-Bravolebrity-That-Is-Also-Free-From-Glaring-Typographical-Errors. Better luck next time, champ!
Her beauty truly comes from within, and her clear internal compass and well-balanced lifestyle is what makes her an arbiter for what's hot. She has always had her own individual road map and is one of those people who beats to their own drum. Many are amazed by her leaps of faith and courage, which are products of her sustainable soul. And back to that energy! I used to think: If we could only package it. And now Kelly has!I would kill to be a fly on the wall during a conversation between Russell Simmons and Kelly Bensimon. But all of these endorsements are making me impatient to dig into Kelly's advice, so I skim over the next few pages and arrive at the introduction: "What's HOT and What's Not." Almost immediately, Kelly reassures us that she was not always the gorgeous, talented socialite she is today -- "No. Let's just say that I was never one of those tiny, cute blonde girls who guys named their hamsters after." Excuse you what? I literally just walked away from my laptop to go talk to my boyfriend and make sure I'm not just ignorant of some otherwise well-known traditional male courtship ritual in which young men adopt rodents and christen them after the women they love. That doesn't seem to be the case, although please reach out if you can shed any additional light on this situation.
When I was trying to come up with a title for this book, I kept asking myself how I would define what I love. "HOT" is the word that best describes what I love, and it's not a word I throw around lightly. "HOT" is attractive, unique, and first-rate -- never mediocre. Avril Lavigne made a video called "HOT." There are "HOT" issues of all my favorite magazines. Hotmail.com was given that name to indicate that it was the best e-mail service, and www.urbandictionary.com, whose definitions are created by their readers, defines "hot" as (among other things) attractive, the best, and someone who makes you wish you had a pause button when they walk by because you don't want that moment to end. (I want you to feel like that "someone.") Health, wellness, and fitness are always hot topics. "HOT" may be a buzzword but it's also how I describe the best there is and the best you can be. I've used the words "smokin' hot" for everything from a killer chicken wing red sauce to a coveted couture gown.There is…a lot to unpack here. My leading hypothesis is that Kelly must have accidentally exposed her internal circuitry to water and started shorting out while writing this passage, causing her to string together a rambling parade of incoherent sentences with no relationship to one another, save a tangential association with the amorphous concept of hotness. Also, it's factually inaccurate. A cursory Google search reveals that Hotmail.com was not "given that name to indicate that it was the best e-mail service." Rather, the service's name was selected as a reference to the use of HTML to create webpages, as is more apparent from the original stylization, HoTMaiL. I know from her savvy allusion to "www.urbandictionary.com" that Kelly is capable of navigating the Internet, so I'm disappointed that she's made such a careless oversight within the first three pages of the book proper.
Is skinny hot? Naturally skinny is hot. Starving yourself in order to change your natural body type in order to get skinny is not hot.
For me, the ultimate HOT girl is the nineteenth-century Gibson girl.
…Bethany Hamilton, the young surfer who lost an arm in a shark attack and didn’t let it stop her from pursuing a sport she loves. She's smokin' HOT.
pregnancy is smokin' HOTI'm distracted from my diligent note-taking by a line that truly makes me laugh out loud.
I don't want to pretend that I'm "just like you." To do that would be disingenuous, and you wouldn't believe me anyway. But I may be more like you than you think. My hair may be ready for Victoria's Secret, but my values are still Midwestern.I appreciate the honesty! As I continue reading, I am pleased to learn that I am, in fact, already consuming this piece of literature in the appropriate way. As Kelly says:
I urge you to make notes as you go along, either in the book itself or, if writing in a book is anathema to you, in a little notebook to use as your own personal guide. Jotting down ideas as they pop into your head is the best way to process them and be sure that they don't leave again before you've had a chance to commit them to long-term memory. Then, if you've made a mistake, when you go back and see it there on paper, you'll remind yourself not to do it again. Or, as I like to say, you'll avoid getting bitten by the same food dog twice!Bitten…by the same….food...dog? Never change, KKB. (As an aside, what's the oveunder on Kelly having even the slightest idea what the word 'anathema' means?) If I'm being totally honest, this book is making me feel a little superfluous. What more can I add when the source material is so impenetrable to begin with? How does one parse the unparseable? Newly humbled, I suppose I'll have to be content with just gaping in confusion alongside the rest of you. And now that I think about it, what better book to build me up from these insecurities and encourage me to be my best? In the words of Kelly herself:
After all, why wouldn't you want to be HOT? What's the alternative? Being "not so hot"?The book is organized into seven chapters, one for each day of the week, focusing on seven distinct facets of hotness. We start our journey on "Monday: Make a List -- Plan and Prepare!" and are immediately blessed with another one of Kelly's philosophical ramblings:
To me, living well is the only option. What, after all, is the only alternative? Living badly? Who aspires to live badly? I want you to live well, and that's going to take some planning.Eager to improve myself, I read on:
What are your goals for yourself? If you're going to make changes in your life, you need to have a plan, you need to prepare, and you need to take the time to get it right -- so that you don't wind up wasting your time. This is my plan, and from now on it's going to be yours. Monday is going to be the day you make a HOT plan and prepare for the rest of your week. Let's get started together!I can't help but feel like this is one of those answers that beauty pageant contestants give when they don't actually know how to respond to a question. Or like a motivational speech written by a rudimentary AI. I can't quite articulate exactly what it is that makes Kelly's writing seem so utterly devoid of logical coherence, but it truly falls into the literary equivalent of the Uncanny Valley.
Run in the street instead of on the sidewalk. I took a lot of flack for this when they filmed me on Season 2 of the Real Housewives of New York City. The thing is, I think that people walking down the street while texting are a lot more dangerous than a car. Drivers will go out of their way to avoid you (accidents are too much paperwork, and they really mess up a day), but strolling texters will walk right into you without even seeing you. You could also get smacked by a shopping bag, a stroller, or even an oversized purse. Sidewalks are really obstacle courses. Beware!Kelly shares some standout tracks from her workout playlist ("It's much more fun exercising to music!"), including the perennial pump-up-the-jam classic, "Skinny Love" by Bon Iver. With no regard for thematic continuity or overarching structure, the next page is dominated by the header "Get Leggier Legs."
An April 10, 2009, article about me in Harper's Bazaar captioned one of the photos "She's got legs." I was born blessed with long lean legs, but I work very hard to keep them looking the way they do. I'm tall, but I could just as easily have long, large legs. And long and large is not hot. Unfortunately I can't give you my legs. But I can help you to be the best you can be.Truly inspirational. I think.
Get rid of any negative thoughts. Negative-town isn't Fun-town.to nonsensical
For every cheeseburger and fries, you owe me 12 cartwheels on the quad with your friends.to bizarrely specific and also racially insensitive.
If you starve yourself for a day because you want to lose weight for Homecoming, you owe me 5 minutes of sitting Indian style in a corner and meditating on why you thought that was a good option.Upon further reflection, I think I would actually be extremely motivated to stick to a diet if the alternative was being reprimanded by Kelly and forced to think about my poor life choices.
From Isaac Newton's First Law of MotionEven biology has something to teach us about how to be HOT:
A body in motion stays in motion. The velocity of a body remains constant unless the body is acted upon by an external force. So if you want to step up your exercise routine, try running in sand instead of on the pavement, or bike through gravel. That way your body will have to work harder in order to stay in motion.
You are a living organism; life is an organic process. You need to be up and active, ready to enjoy the process. Be open and available and ready to do fun stuff. Participating in what you love is HOT.I'm truly impressed by Kelly Bensimon's unparalleled ability to reframe the most basic common sense as divinely inspired wisdom. We see this in lines like
If you're feeling a bit frazzled and you need to calm down, you might want to take a yoga class.or, as we read in another "HOT Tip" panel
Don't be afraid to drink water while working out.I refuse to believe that this is a problem any person has ever faced. Even Aviva Drescher is not afraid of drinking water while working out (although, for the record, she is afraid of aluminum foil). Kelly closes out this chapter by encouraging the reader to "do one thing every day that takes you out of your comfort zone." If you find yourself lacking inspiration, she provides helpful suggestions, such as "try a fruit you've never eaten" and "try tap dancing." As she asserts, "there's nothing more foolish than sitting on your butt when you could be moving your body and having fun."
I don't believe in diets; diets are for people who want to get skinny. I want you to be happy. If you feel good about yourself, you'll make good choices. If you starve yourself to be skinny, you'll be undermining your sense of self-worth and you'll be unhappy every day. Eating well -- a variety of high-quality, fresh, unprocessed foods -- is for people who want to be happy -- and if you're not happy you won't be hot! Happy is always better than skinny.This is starting to feel like some sort of word problem from Algebra II. If happy is better than skinny, but hot is equal to happy, diet = die + t??? Kelly tells us that all women fall into two categories: overachievers and underachievers. Being an overachiever is good, and being an underachiever is bad. Here are some things you can do to become an overachiever:
Make good choices.
When in doubt, have fun.
Keep smiling.Kelly's motivational-phrasebook app apparently starts to glitch out right about here, but she continues on:
Stay positive and move forward. This is your last try at today. Yesterday may not have been great, but, today is better -- you just need to see it that way. The choice is up to you.The idea of someone being in such a dark psychological place that they are able to find inspiration in those words is so deeply sad to me that I can hardly bear to consider it. Thankfully, Kelly has already taken a hard left turn into what I think is some sort of extended metaphor:
I've already said that you need to treat your body like a Ferrari, but maybe you prefer a Maserati, an Aston Martin, a Corvette, or even a Bentley. Whatever your luxury car of choice, if you treat it well, it will increase in value; if you treat it like a bargain rental car, it's just going to wear out -- and being worn out is not hot!Ah, yes, I'd momentarily forgotten that cars almost always increase in value after they're purchased, and don't have a culturally ubiquitous reputation for losing most of their resale value immediately. Solid analogy. Apropos of nothing, we get a "HOT Tip" list of "model diet secrets that DON'T work." I'm extremely glad that Kelly encouraged us to take notes while reading -- I'd be devastated if any of these pointers had escaped my attention.
Eating Kleenex to make yourself feel full does not work.
The Graham cracker diet does not work.
Drugs do not work.Well, I suppose this clears up some Scary Island confusion. Had Kelly indeed been doing meth (as the reported cat-pee smell might suggest), she would be fully aware that many drugs are, in fact, extremely effective ways to lose weight. But lest you start to lose faith in the expertise of our fearless leader, read on: "when it comes to food choices, I've probably made every mistake in the book." By which she means that she ate Chinese chicken soup before giving birth to her first daughter and it made her sick, so she ate a turkey sandwich before giving birth to her second daughter and she didn’t get sick. To be perfectly honest, I'm struggling to find a way to apply this wisdom to my own life, but I'm sure it will become clear in no time!
When I was accused of being a "bitch" on national television, I was really upset. My response was to find comfort in Mexican food and margaritas for lunch and dinner three days straight.But we promptly return to form on the next page as she recounts her daily diet of "2 green juices," "a KKBfit lunch," and "a KKBfit dinner." I'd like to take a moment to appreciate how generous it is of Kelly to share her wisdom -- earned through a lifetime of catastrophic missteps -- so freely. It certainly didn’t come without a cost, as the following anecdote illustrates:
On the last day of my juice fast, I took my older daughter to a Yankees game where we gorged on sushi. (Yes, they have sushi at Yankee Stadium) As a result, I was stuffed and blinded by carbs when A-Rod came up to bat and hit a home run. Was I able to savor that A-Rod moment with my daughter? Absolutely not. I was in a food coma. Will I ever let myself be thrown into a food frenzy again? No! Lesson learned: I made another stupid food choice, and because of that choice I missed that home run moment with my daughter. From now on, when I go to a Yankees game I'll have a small hot dog instead….I want you to do the same.Verily! Heed her words of wisdom, lest ye not also lose the precious chance for thine own A-Rod moment.
Ooh, sorry Brad, I won't be able to make it to this afternoon's meeting -- it actually conflicts with my daily session of believing in my ability to make good choices today and every day. No, I understand how that could seem like an abstract sentiment rather than something that actually takes up time within your daily schedule, but if Kelly has to do it, so do I! And to be honest, my day is packed enough as it is -- it takes at least a second or two for me to tell myself I look HOT (because I do!), and I'm just worried that if I try to squeeze anything else in, it will cut into my mid-morning health celebration. Wish I could help!
- Celebrate your own health. We take health for granted.
- Get up in the morning and say, "I'm so grateful to be where I am and look the way I do," no matter what your size is.
- Tell yourself you look HOT, because you do.
- Believe in your ability to make good choices today and every day.
- Be mindful of what you eat. If I have to be mindful of what I eat, so do you. We're in this together.
If I don't eat [well], I'm violating my own laws of energy economics and my body goes either into inflation mode (too much energy when I don't need it) or recession mode (not enough energy in the bank for me to draw from). The key is to create economic equilibrium: eating well so that I feel good, which allows me to be happy.I am begging someone to start a GoFundMe where we raise money to pay Kelly to explain how the economy works. The next page introduces us to "The KKB 3-Day Supermodel Diet," which is less of a diet and more a random assortment of miscellaneous health-related sentiments that reek of the 2009 pro-ana tumblrsphere:
Chew your food 8 times instead of 3 or 4.
Brush your teeth and chew mint gum as soon as you finished eating. When your mouth is fresh and minty, you'll be less tempted to eat again.The final tip ("nurture yourself") includes a reminder to "blush your checks [sic]." Which may be a typo, but could also very well just be some strange Kelly saying that no one else has ever used in the history of the English language. On the next page, we're introduced to "Kelly's Food Plate." Which other, less sophisticated people typically refer to as the food pyramid. Kelly also takes a brief aside (in a feature box labeled "hot button issue") to expound upon her favorite delicacy, the humble jelly bean:
If you're a fan of the Real Housewives of New York City you probably remember that on Season 3 I took a lot of flack for eating jelly beans and talking about processed and unprocessed foods. I was actually making light of that food snob moment. Who stops at a gas station and asks for carrots? Did you bring your organic food cooler with you on this road trip? The important part is not to be a food snob; but when in doubt choose the best option. Sometimes it's better to be happy than it is to be right. Was I able to make my point? Clearly it wasn’t in the cards at that moment.This is a truly stunning synthesis of her experience. Underestimate Kelly at your own peril -- this girl has been playing 4D chess for longer than we know.
There's absolutely no reason why you, wherever you live, can't eat "colorful" foods. All over the country there are "gi-normous" supermarkets where fruit and vegetable aisles are bursting with every color of the rainbow.I am starting to get a "gi-normous" headache trying to make sense of this chaos. Kelly's advice that we can "mix and match what's there to make a FrenAsian or an ItaloGreek meal" is not helping. We also get some tips for how to grocery shop responsibly:
This is incoherent, right? I know I need to wrap up Part 1 of this write-up pretty soon, because I've read this sentence at least two dozen times trying to make some sense of it, and am still at an utter loss. I assume she's left out a negative somewhere, but at this point, I realize I've already thought about this tip for approximately ten times longer than Kelly ever has, so I'll move on.
- Always go with a list and never buy more than two items you planned on taking home.
Shitake/oyster mushroom combination packs
Lavender pepperTruly the voice of a generation! Decades from now, English teachers will be teaching their students about a fabled wordsmith who once uttered those eternal words, "shitake/oyster mushroom combination packs." Because this book has absolutely no respect for logical cohesion, we are hurled immediately into a diatribe about how expensive it can be to buy organic -- "I recently walked out of an organic market having paid $400 for just three bags of groceries." As I read on, however, it becomes quickly apparent that Kelly has no idea what the concept of 'organic' even means:
"Organic," in any case, seems like something of a misnomer to me. I know the Food and Drug Administration has regulations for certifying foods organic, but to me, for foods to be truly and totally organic, they would have to be grown in a test tube or a greenhouse with no exposure to the natural elements.Well, sure Kelly. If that's what you would like to use the word "organic" to mean, be my guest. She tosses us another crumb of helpful guidance, but it only serves to make me feel exceptionally sorry for Kelly's daughters and everything they have to endure:
Plate your food as if it were being served to you in a fine restaurant. Use a fancy foreign accent as you invite everyone to come to the table. Or try saying it in French. My girls love it when I announce, "Le dîner est servi!"We learn in yet another "HOT tip" that "fast food doesn't have to be fat food," and Kelly tells us for the eighth time that she eats two oranges every morning. In what has already become a recurring theme for me in this book, the following passage makes me desperately curious to know how Kelly thinks science works:
One question people frequently ask me is whether I believe in taking vitamins or supplements, and the answer is "yes, I do," because, even though I know my diet is healthy, I can't be sure that I'm getting all the nutrients I need. All the vitamins and minerals we need can be found naturally in foods, but how do we know, even if we're eating a healthy diet, that we're getting everything we need?I flip back two pages to confirm that Kelly told us quite recently how important it is to read nutrition labels to know what is in the food we eat (to make sure we avoid foods "whose labels are full of words you can't pronounce"). Exactly how she is reading these nutrition labels yet still manages to have no inkling how anyone could possibly begin to assess their vitamin and mineral intake eludes me. She continues:
I don't want to take that chance. I think of the food I eat as fuel and vitamins as my oil -- my body's engine needs both. Vitamins and supplements are not food replacements, but we're exposed to so many environmental toxins on a daily basis that I believe we need to supplement our diets to counteract all the harm those substances can cause.I can certainly think of something that is causing harm to my psychological stability at this particular moment, which I should probably take as a sign to wrap things up for today and go read some incredibly dense Victorian prose or something to remind myself what a properly constructed sentence looks like. Promise I won't leave you waiting for long!!
Hello fellow Autists! Longtime reader, first DD post for me. Like the rest of you, I see the writing on the wall with the spiking cases in Florida, Arizona, California, Texas (I am in Houston), etc. and want to profit from the next market move. I believe many of these states will be slow to respond with effective quarantine measures, and anecdotally I have seen very limited compliance with social distancing and mask guidelines. Due to the long incubation period of SARS-CoV-2, the case count spike we are seeing is most likely from exposure 2-3 weeks ago, and opportunities for spread have only increased since then. Additionally, a large percentage of the population is unable to interpret widely available public data and believes the increased case count is a fabrication because "we are testing more". However, a linear regression of the data for Texas shows the percent of tests that come back positive has increased from an average of ~4% 30 days ago to ~12% now, while the average number of tests have only increased by 10-20%. It is very clear from the data that we are seeing community spread at an exponential rate. Many will not come to this realization and alter their behavior until one of their loved ones becomes very sick. This will allow several more weeks of community spread to go on before R0 is brought back below 1. If the death count gets high enough, fear will take over and many will shelter in place again, either voluntarily or by mandate. The V-shaped recovery thesis becomes much harder to defend at this point, to say the least.submitted by HypnoticStrix to wallstreetbets [link] [comments]
For those of you still reading, you are probably thinking "I know all of this, how do I make those sweet, sweet tendies, fuckface?". Most of you are banking on SPY puts, but I think you might have better odds at a roulette table. The Fed has killed price discovery, and can severely restrict the risk/reward ratio of bearish positions with literally an infinite arsenal. The retail investors know this and will buy any dips, and any new shelter-in-place orders gives Jerome a fantastic excuse to fire up the digital printer again. Don't fight the Fed, and don't bet against a retail-mania driven bubble. However, the Fed is not interested in propping up the price of oil (gasp!).
Chart with colors and lines and shit so you know I is tarded
West Texas Crude dropped from a pre-COVID high of $65/bbl to futures at negative $37/bbl as a result of the demand destruction from worldwide quarantines. During this same period, an ETF that inversely tracks crude at a 2x clip, SCO, went from $12 to an intra-day peak of $67. SCO spiked twice more in the following days as crude underwent wild price swings. Fast-forward to today. Crude just formed a double-top chart pattern $40.50, exactly at the 61.8% Fibonacci Retracement level from it's January 2020 peak to it's April 20th low. This all-time low occurred an entire month after SPY bottomed on March 23rd, and this is because crude prices are actually driven by...wait for it...supply and demand. In other words, crude is still driven by fundamentals, while the stock market is (currently) not. In fact, government bailouts of the struggling US shale oil companies would only allow them to continue to flood the market, further driving down the price of oil.
The US Energy Information Administration has forecasted 2H 2020 crude prices to average $37/bbl based on a V-shaped recovery (https://www.eia.gov/outlooks/steo/report/global_oil.php). We are currently at $40/ bbl based on OPEC+ compliance and recovery optimism, and we aren't even into Q3. There are too many variables for me to accurately predict actual crude demand in a W-shaped scenario as subsequent infection spikes slow the world's energy demands down again, but a gain in crude stocks will immediately send prices falling. I would expect crude to look for support near the 50% retracement level around $32/bbl, which would push SCO approximately 40% higher than current due to the daily compounded 2x leverage. Another wave of government mandated lockdowns would likely see crude fall to $25 or below, which would put SCO at around $44. Another Oil-geddon scenario would put SCO -at $60 or more.
EIA 2021 Forecast
Nothing boosts oil prices like a foreign conflict, and tensions have certainly been on the rise this year. An airstrike on a tanker would be a bad headline for this position. Also further OPEC+ cuts would not be good news for me, but many of the participating countries are facing recessionary pressure and may violate their agreements to attempt to save their own budgets. If I am missing any other risks, please let me know.
COV-SARS-2 is once again pressuring global energy demand. The Fed can fuck your SPY puts, but might actually hurt oil prices. Go long on SCO or go with UCO puts. Choose expiration and strike price per your risk tolerance.
Buying SCO directly will decouple the risk associated with trying to time the market. But I know how safe you guys like to play it, so load up on those puts! 🚀🚀🚀
6/24, 10:00 - I have 7,000 shares of SCO cost averaged in at $17.50. After peaking at $41.62 yesterday, WTI is now trading below $39 on news that crude stocks are building while COVID cases continue to rise exponentially in parts of the US and the world.
6/24, 12:15 - RSI hit oversold on the bounce, so I bought 2,000 more shares. Shaping up to be an excellent day. 10% plus daily gains on an almost 200k position with lots more room to run. Also interesting to note that crude stocks actually gained today even before second wave demand destruction is here. Oil is down over twice as much as SPY for the reasons explained above.
6/25, 7:30 - WTI is down another 2% in pre-market on second wave fears. $37 was a level of support for June 9-17th, and we are right up against it again. If we break through today the next level is at $34.50 for another 15% or more of profits.
6/25, 9:00 - WTI bounces HARD off of the $37 support level on news that continuing unemployment claims dropped slightly. Lesson learned: take partial profits when prior levels of support are reached and buy back in after either support is breached with conviction or next level of resistance is met.
6/26, 8:00 - WTI durdled at the $39 resistance level overnight and is now falling hard pre-market. Looks like I may have a chance to try the partial profit-taking strategy above later today.
6/26, 14:55 - Another strong day, but we did not retest the $37 WTI level again. I took some partial profits (4,000 shares) at end of the day and will watch oil prices through the wknd. As predicted, Texas is already rolling back re-opening plans and cases continue to build exponentially all over the South. South America and India are showing textbook exponential rises as well. I also started some positions in AHPI and APT to play the potential mandatory mask laws. So far the trade is up over $15k.
6/29, 9:30 - Oil is recovering on more economic bullishness. I was stopped out of the rest of my position at $18.50. I will let the dust settle and find another entry point later this week.
7/5 - Several states have rolled back re-opening guidelines as cases continue to grow exponentially. I will be watching WTI action overnight to see if a bearish head and shoulders pattern will complete.
Alright CYKAS, Drill Sgt. Retarded TQQQ Burry is in the house. Listen up, I'm gonna train yo monkey asses to make some motherfucking money.submitted by dlkdev to wallstreetbets [link] [comments]
“Reeee can’t read, strike?” - random_wsb_autistBitch you better read if you want your Robinhood to look like this:
Why am I telling you this?
Because I like your dumb asses. Even dickbutts like cscqb4. And because I like seeing Wall St. fucking get rekt. Y’all did good until now, and Wall St. is salty af. Just google for “retail traders” news if you haven’t seen it, and you’ll see the salty tears of Wall Street assholes. And I like salty Wall St. assholes crying like bitches.
That said, some of you here are really motherfucking dense & the sheer influx of retardation has been driving away some of the more knowledgeable folks on this sub. In fact, in my last post, y'all somehow managed to downvote to shit the few guys that really understood the points I was making and tried to explain it to you poo-slinging apes. Stop that shit yo! A lot of you need to sit the fuck down, shut your fucking mouth and listen.
So I'm going to try and turn you rag-tag band of dimwits into a respectable army of peasants that can clap some motherfucking Wall Street cheeks. Then, I'm going to give you a mouthbreather-proof trade that I don't think even you knuckleheads can mess up (though I may be underestimating you).
If you keep PM-ing me about your stupid ass losses after this, I will find out where you live and personally, PERSONALLY, shit on your doorstep.
This is going to be a long ass post. Read the damned post. I don't care if you're dyslexic, use text-to-speech. Got ADHD? Pop your addys, rub one out, and focus! Are you 12? Make sure to go post in the paper trading contest thread first.
This shit is targeted at the mouthbreathers, but maybe more knowledgeable folk’ll find some useful info, idk. How do you know if you’re in the mouthbreather category? If your answer to any of the following questions is yes, then you are:
Table of Contents:
I. Maybe, just maybe, I know what I’m talking about
II. Post-mortem of the February - March 2020 Great Depression
III. Mouthbreather's bootcamp on managing a position – THE TECHNICALS
IV. Busting your retarded myths
V. LIQUIDITY NUKE INBOUND
VI. The mouthbreather-proof trade - The Akimbo
VII. Quick hints for non-mouthbreathers
Chapter I - Maybe, just maybe, I know what I’m talking about
I'm not here to rip you off. Every fucking time I post something, a bunch of dumbasses show up saying I'm selling you puts or whatever the fuck retarded thoughts come through their caveman brains.
"hurr durr OP retarded, OP sell puts" - random_wsb_autistSit down, Barney, I'm not here to scam you for your 3 cents on OTM puts. Do I always get it right? Of course not, dumbasses. Eurodollar play didn't work out (yet). Last TQQQ didn't work out (yet). That’s just how it goes. Papa Buffet got fucked on airlines. Plain retard Burry bought GME. What do you fucking expect?
Meanwhile, I keep giving y'all good motherfucking plays:
Chapter II. Post-mortem of the February - March 2020 Great Depression
Do you really understand what happened? Let's go through it.
I got in puts on 2/19, right at the motherfucking top, TQQQ at $118. I told you on 2/24 TQQQ ($108) was going to shit, and to buy fucking puts, $90ps, $70ps, $50ps, all the way to 3/20 $30ps. You think I just pulled that out of my ass? You think I just keep getting lucky, punks? Do you have any idea how unlikely that is?
Well, let's take a look at what the fuckstick Kevin Cook from Zacks wrote on 3/5:
How Many Sigmas Was the Flash Correction Plunge?
"Did you know that last week's 14% plunge in the S&P 500 SPY was so rare, by statistical measures, that it shouldn't happen once but every 14,000 years?"
On 3/5, TQQQ closed at $81. I just got lucky, right? You should buy after a 5-sigma move, right? That's what fuckstick says:
"Big sigma moves happen all the time in markets, more than any other field where we collect and analyze historical data, because markets are social beasts subject to "wild randomness" that is not found in the physical sciences.Ahahaha, fuckstick bought TQQQ at $70, cuz that's what you do after a random 5-sigma move, right? How many of you dumbasses did the same thing? Don't lie, I see you buying 3/5 on this TQQQ chart:
Meanwhile, on 3/3, I answered the question "Where do you see this ending up at in the next couple weeks? I have 3/20s" with "under 30 imo".
Well good fucking job, because a week later on 3/11, TQQQ closed at $61, and it kept going.
Nomura: Market staring into the abyss
"The plunge in US equities yesterday (12 March) pushed weekly returns down to 7.7 standard deviations below the norm. In statistical science, the odds of a greater-than seven-sigma event of this kind are astronomical to the point of being comical (about one such event every 160 billion years).Let's see what Stephen Mathai-Davis, CFA, CQF, WTF, BBQ, Founder and CEO of Q.ai - Investing Reimagined, a Forbes Company, and a major fucktard has to say at this point:
"Our AI models are telling us to buy SPY (the SPDR S&P500 ETF and a great proxy for US large-cap stocks) but since all models are based on past data, does it really make sense? "Good job, fuckfaces. Y'all bought this one too, admit it. I see you buying on this chart:
Well guess what, by 3/18, a week later, we did get another 5 standard deviation move. TQQQ bottomed on 3/18 at $32.73. Still think that was just luck, punk? You know how many sigmas that was? Over 12 god-damn sigmas. 12 standard deviations. I'd have a much better chance of guessing everyone's buttcoin private key, in a row, on the first try. That's how unlikely that is.
"Hurr durr you said it's going to 0, so you're retarded because it didn't go to 0" - random_wsb_autistYeah, fuckface, because the Fed bailed ‘em out. Remember the $150b “overnight repo” bazooka on 3/17? That’s what that was, a bailout. A bailout for shitty funds and market makers like Trump's handjob buddy Kenny Griffin from Citadel. Why do you think Jamie Dimon had a heart attack in early March? He saw all the dogshit that everyone put on his books.
Yup, everyone got clapped on their stupidly leveraged derivatives books. It seems Citadel is “too big to fail”. On 3/18, the payout on 3/20 TQQQ puts alone if it went to 0 was $468m. And every single TQQQ put expiration would have had to be paid. Tens or hundreds of billions on TQQQ puts alone. I’d bet my ass Citadel was on the hook for a big chunk of those. And that’s just a drop in the bucket compared to all the other blown derivative trades out there.
Y’all still did good, 3/20 closed at $35. That’s $161m/$468m payoff just there. I even called you the bottom on 3/17, when I saw that bailout:
"tinygiraffe21 1 point 2 months ago
"hurr durr, it went lower on 3/18 so 3/17 wasn't the bottom" - random_wsb_autistIdiot, I have no way of knowing that Billy boy Ackman was going to go on CNBC and cry like a little bitch to make everyone dump, so he can get out of his shorts. Just like I have no way of knowing when the Fed decides to do a bailout. But you react to that, when you see it.
Do you think "Oh no world's ending" and go sell everything? No, dumbass, you try to figure out what Billy's doing. And in this case it was pretty obvious, Billy saw the Fed train coming and wanted to close his shorts. So you give the dude a hand, quick short in and out, and position for Billy dumping his short bags.
Video of Billy & the Fed train
Here's what Billy boy says:
“But if they don’t, and the government takes the right steps, this hedge could be worth zero, and the stock market could go right back up to where it was. So we made the decision to exit.”https://www.businessinsider.sg/bill-ackman-explains-coronavirus-trade-single-best-all-time-podcast-2020-5
Also, “the single best trade of all time.” my ass, it was only a 100-bagger. I gave y’all a 150-bagger.
So how could I catch that? Because it wasn't random, yo. And I'm here to teach your asses how to try to spot such potential moves. But first, the technical bootcamp.
Chapter III. Mouthbreather's bootcamp on managing a position – THE TECHNICALS
RULE 1. YOU NEVER BUY OPTIONS AT OPEN. You NEVER OVERPAY for an option. You never FOMO into buying too fast. You NEVER EVER NEVER pump the premium on a play.
I saw you fuckers buying over 4k TQQQ 5/22 $45 puts in the first minutes of trading. You pumped the premium to over $0.50 dudes. The play's never going to work if you do that, because you give the market maker free delta, and he's going to hedge that against you. Let me explain simply:
Let's say a put on ticker $X at strike $50 is worth $1, and a put at strike $51 is worth $2.
If you all fomo in at once into the same strike, the market maker algos will just pull the asks higher. If you overpay at $2 for the $50p, the market maker will just buy $51ps for $2 and sell you $50ps for 2$. Or he'll buy longer-dated $50ps and sell you shorter-dated $50ps. Max risk for him is now 0, max gain is $1. You just gave him free downside insurance, so of course he's going to start going long. And you just traded against yourself, congrats.
You need to get in with patience, especially if you see other autists here wanting to go in at the same time. Don't step on each other's toes. You put in an order, and you wait for it to fill for a couple of seconds. If it doesn't fill, AND the price of the option hasn't moved much recently, you can bump the bid $0.01. And you keep doing that a few times. Move your strikes, if needed. Only get a partial fill or don't get a fill at all? You cancel your bid. Don't fucking leave it hanging there, or you're going to put a floor on the price. Let the mm algos chill out and go again later.
RULE 2. WATCH THE TIME. Algos are especially active at x:00, x:02, x:08, x:12, x:30 and x:58. Try not to buy at those times.
RULE 3. YOU USE MULTIPLE BROKERS. Don't just roll with Robinhood, you're just gimping yourself. If you don't have another one, open up a tasty, IB, TD, Schwab, whatever. But for cheap faggy puts (or calls), Robinhood is the best. If you want to make a play for which the other side would think "That's free money!", Robinhood is the best. Because Citadel will snag that free money shit like no other. Seriously, if you don't have a RH account, open one. It's great for making meme plays.
RULE 4. YOU DON'T START A TRADE WITH BIG POSITIONS. Doesn't matter how big or small your bankroll is. If you go all-in, you're just gambling, and the odds are stacked against you. You need to have extra cash to manage your positions. Which leads to
RULE 5. MANAGING YOUR WINNERS: Your position going for you? Good job! Now POUND THAT SHIT! And again. Move your strikes to cheaper puts/calls, and pound again. And again. Snowball those gains.
RULE 6A. POUND THOSE $0.01 PUTS:
So you bought some puts and they’re going down? Well, the moment they reach $0.01, YOU POUND THOSE PUTS (assuming there’s enough time left on them, not shit expiring in 2h). $0.01 puts have amazing risk/return around the time they reach $0.01. This is not as valid for calls. Long explanation why, but the gist of it is this: you know how calls have unlimited upside while puts have limited upside? Well it’s the reverse of that.
RULE 6B. MANAGING YOUR LOSERS:
Your position going against you? Do you close the position, take your loss porn and post it on wsb? WRONG DUMBASS. You manage that by POUNDING THAT SHIT. Again and again. You don't manage losing positions by closing. That removes your gainz when the market turns around. You ever close a position, just to have it turn out it would have been a winner afterwards? Yeah, don't do that. You manage it by opening other positions. Got puts? Buy calls. Got calls? Buy puts. Turn positions into spreads. Buy spreads. Buy the VIX. Sell the VIX. They wanna pin for OPEX? Sell them options. Not enough bankroll to sell naked? Sell spreads. Make them fight you for your money, motherfuckers, don't just give it away for free. When you trade, YOU have the advantage of choosing when and where to engage. The market can only react. That's your edge, so USE IT! Like this:
Initial TQQQ 5/22 position = $5,000. Starts losing? You pound it.
Total pounded in 5/22 TQQQ puts = $10,824. Unfortunately expired worthless (but also goes to show I'm not selling you puts, dickwads)
Then the autists show up:
"Hahaha you lost all your money nice job you fucking idiot why do you even live?" - cscqb4Wrong fuckface. You see the max pain at SPX 2975 & OPEX pin coming? Sell them some calls or puts (or spreads).
Sold 9x5/20 SPX [email protected], bam +$6,390. Still wanna pin? Well have some 80x5/22 TQQQ $80cs, bam anotha +$14,700.
+$21,090 - $10,824 = +$10,266 => Turned that shit into a +94.85% gain.
You have a downside position, but market going up or nowhere? You play that as well. At least make some money back, if not profit.
5/22, long weekend coming right? So you use your brain & try to predict what could happen over the 3-day weekend. Hmm, 3 day weekend, well you should expect either a shitty theta-burn or maybe the pajama traders will try to pooomp that shite on the low volume. Well make your play. I bet on the shitty theta burn, but could be the other, idk, so make a small play.
Sold some ES_F spreads (for those unaware, ES is a 50x multiplier, so 1 SPX = 2 ES = 10 SPY, approximately). -47x 2955/2960 bear call spreads for $2.5. Max gain is $2.5, max loss is 2960-2955 = $5. A double-or-nothing basically. That's $5,875 in premium, max loss = 2x premium = $11,750.
Well, today comes around and futures are pumping. Up to 3,014 now. Do you just roll over? You think I'm gonna sit and take it up the ass? Nah bros that's not how you trade, you fucking fight them. How?
47x 2960 calls
-47x 2955 calls
Pajama traders getting all up in my grill? Well then I buy back 1 of the 2955 calls. Did that shit yesterday when futures were a little over 2980, around 2982-ish. Paid $34.75, initially shorted at $16.95, so booked a -$892 loss, for now. But now what do I have?
46x 2955/2960 bear calls
1x 2960 long call
So the fuckers can pump it. In fact, the harder they pump it, the more I make. Each $2.5 move up in the futures covers the max loss for 1 spread. With SPX now at ~3015, that call is $55 ITM. Covers 24/46 contracts rn. If they wanna run it up, at 3070 it's break-even. Over that, it's profit. I'll sell them some bear call spreads over 3050 if they run it there too. They gonna dump it? well under 2960 it's profit time again. They wanna do a shitty pin at 3000 today? Well then I'll sell them some theta there.
Later edit: that was written yesterday. Got out with a loss of only $1.5k out of the max $5,875. Not bad.
And that, my dudes, is how you manage a position.
RULE 7 (ESPECIALLY FOR BEARS). YOU DON'T KEEP EXTRA CASH IN YOUR BROKER ACCOUNT. You don't do it with Robinhood, because it's a shitty dumpsterfire of a broker. But you don't do it with other brokers either. Pull that shit out. Preferably to a bank that doesn't play in the markets either, use a credit union or some shit. Why? Because you're giving the market free liquidity. Free margin loans. Squeeze that shit out, make them work for it. Your individual cash probably doesn't make a dent, but a million autists with an extra $1200 trumpbucks means $1.2b. That's starting to move the needle. You wanna make a play, use instant deposits. And that way you don't lose your shit when your crappy ass broker or bank gets its ass blown up on derivative trades. Even if it's FDIC or SIPC insured, it's gonna take time until you see that money again.
Chapter IV. BUSTING YOUR RETARDED MYTHS
MYTH 1 - STONKS ONLY GO UP
Do you think the market can go up forever? Do you think stOnKs oNLy Go uP because Fed brrr? Do you think SPX will be at 5000 by the end of the month? Do you think $1.5 trillion is a good entry point for stonks like AAPL or MSFT? Do you want to buy garbage like Hertz or American Airlines because it's cheap? Did you buy USO at the bottom and are now proud of yourself for making $2? Well, this section is for you!
Let's clear up the misconception that stonks only go up while Fed brrrs.
What's your target for the SPX top? Think 3500 by the end of the year? 3500 by September? 4000? 4500? 5000? Doesn't matter, you can plug in your own variables.
Let's say SPX only goes up, a moderate 0.5% each period as a compounded avg. (i.e. up a bit down a bit whatever, doesn't matter as long as at the end of your period, if you look back and do the math, you'll get that number). Let's call this variable BRRR = 0.005.
Can you do the basic math to calculate the value at the end of x periods? Or did you drop out in 5th grade? Doesn't matter if not, I'll teach you.
Let's say our period is one week. That is, SPX goes up on average 0.5% each week on Fed BRRR:
2950 * (1.005^x), where x is the number of periods (weeks in this case)
So, after 1 month, you have: 2950 * (1.005^4) = 3009
After 2 months: 2950 * (1.005^8) = 3070
End of the year? 2950 * (1.005^28) = 3392
Now clearly, we're already at 3015 on the futures, so we're moving way faster than that. More like at a speed of BRRR = 1%/wk
2950 * (1.01^4) = 3069
2950 * (1.01^8) = 3194
2950 * (1.01^28) = 3897
Better, but still slower than a lot of permabulls would expect. In fact, some legit fucks are seriously predicting SPX 4000-4500 by September. Like this dude, David Hunter, "Contrarian Macro Strategist w/40+ years on Wall Street". IDIOTIC.
That'd be 2950 * (BRRR^12) = 4000 => BRRR = 1.0257 and 2950 * (BRRR^12) = 4500 => BRRR = 1.0358, respectively.
Here's why that can't happen, no matter the amount of FED BRRR: Leverage. Compounded Leverage.
There's currently over $100b in leveraged etfs with a 2.5x avg. leverage. And that's just the ones I managed to tally, there's a lot of dogshit small ones on top of that. TQQQ alone is now at almost $6b in AUM (topped in Fed at a little over $7b).
Now, let's try to estimate what happens to TQQQ's AUM when BRRR = 1.0257. 3XBRRR = 1.0771. Take it at 3XBRRR = 1.07 to account for slippage in a medium-volatility environment and ignore the fact that the Nasdaq-100 would go up more than SPX anyway.
$6,000,000,000 * (1.07^4) = $7,864,776,060
$6,000,000,000 * (1.07^8) = $10,309,100,000
$6,000,000,000 * (1.07^12) = $13,513,100,000
$6,000,000,000 * (1.07^28) = $39,893,000,000.
What if BRRR = 1.0358? => 3XBRR = 1.1074. Take 3XBRRR = 1.10.
$6,000,000,000 * (1.1^4) = $8,784,600,000
$6,000,000,000 * (1.1^8) = $12,861,500,000
$6,000,000,000 * (1.1^12) = $18,830,600,000
$6,000,000,000 * (1.1^28) = $86,526,000,000
And this would have to get 3x leveraged every day. And this is just for TQQQ.
Let's do an estimation for all leveraged funds. $100b AUM, 2.5 avg. leverage factor, BRRR = 1.0257 => 2.5BRRR = 1.06425
$100b * (1.06^4) = $128.285b
$100b * (1.06^8) = $159.385b
$100b * (1.06^12) = $201.22b
$100b * (1.06^28) = $511.169b
That'd be $1.25 trillion sloshing around each day. And the market would have to lose each respective amount of cash into these leveraged funds. Think the market can do that? You can play around with your own variables. But understand that this is just a small part of the whole picture, many other factors go into this. It's a way to put a simple upper limit on an assumption, to check if it's reasonable.
In the long run, it doesn't matter if the Fed goes BRRR, if TQQQ takes in it's share of 3XBRRR. And the Fed can't go 3XBRRR, because then TQQQ would take in 9XBRRR. And on top of this, you have a whole pile of leveraged derivatives on top of these leveraged things. Watch (or rewatch) this: Selena Gomez & Richard H. Thaler Explaining Synthetic CDO through BLACKJACK
My general point, at the mouth-breather level, is that Fed BRRR cannot be infinite, because leverage.
And these leveraged ETFs are flawed instruments in the first place. It didn't matter when they started out. TQQQ and SQQQ started out at $8m each. For the banks providing the swaps, for the market providing the futures contracts, whatever counter-party to whatever instrument they would use, that was fine. Because it balanced out. When TQQQ made a million, SQQQ lost a million (minus a small spread, which was the bank's profit). Bank was happy, in the long run things would even out. Slippage and spreads and fees would make them money. But then something happened. Stonks only went up. And leveraged ETFs got bigger and more and more popular.
And so, TQQQ ended up being $6-7b, while SQQQ was at $1b. And the same goes for all the other ETFs. Long leveraged ETF AUM became disproportionate to short AUM. And it matters a whole fucking lot. Because if you think of the casino, TQQQ walks up every day and says "I'd like to put $18b on red", while SQQQ walks up and says "I'd only like to put $3b on black". And that, in turn, forces the banks providing the swaps to either eat shit with massive losses, or go out and hedge. Probably a mix of both. But it doesn't matter if the banks are hedged, someone else is on the other side of those hedges anyway. Someone's eating a loss. Can think of it as "The Market", in general, eating the loss. And there's only so much loss the market can eat before it craps itself.
If you were a time traveller, how much money do you think you could make by trading derivatives? Do you think you could make $20 trillion? You know the future prices after all... But no, you couldn't. There isn't enough money out there to pay you. So you'd move the markets by blowing them up. Call it the Time-travelling WSB Autist Paradox.
If you had a bucket with a hole in the bottom, even if you poured an infinite amount of water into it, it would never be full. Because there's a LIQUIDITY SINK, just like there is one in the markets.
And that, my mouth-breathing friends, is the reason why FED BRRR cannot be infinite. Or alternatively, "STONKS MUST GO BOTH UP AND DOWN".
MYTH 2 - YOU CAN'T TIME THE MARKET
On Jan 14, 2020, I predicted this: Assuming that corona doesn't become a problem, "AAPL: Jan 28 $328.3, Jan 31 $316.5, April 1 $365.7, May 1 $386, July 1 $429 December 31 $200."
Now take a look at the AAPL chart in January. After earnings AAPL peaked at $327.85. On 1/31, after the 1st hour of trading, when the big boys make moves, it was at $315.63. Closed 1/31 at $309.51. Ya think I pulled this one out of my ass too?
Yes you can time it. Flows, motherfucker, flows. Money flow moves everything. And these days, we have a whole lot of RETARDED FLOW. Can't even call it dumb flow, because it literally doesn't think. Stuff like:
And many many others. Spot the flow, and you get an edge. How could I predict where AAPL would be after earnings within 50 cents and then reverse down to $316 2 days later? FLOWS MOTHERFUCKER FLOWS. The market was so quiet in that period, that is was possible to precisely figure out where it ended up. Why the dump after? Well, AAPL earnings (The 8-K) come out on a Wednesday. The next morning, after market opens the 10-Q comes out. And that 10-Q contains a very important nugget of information: the latest number of outstanding shares. But AAPL buybacks are regular as fuck. You can predict the outstanding shares before the market gets the 10-Q. And that gives you EDGE. Which leads to
MYTH 3 - BUYBACKS DON'T MATTER
Are you one of those mouthbreathers that parrots the phrase "buybacks are just a tax-efficient way to return capital to shareholders"? Well sit the fuck down, I have news for you. First bit of news, you're dumb as shit. Second bit:
On 1/28, AAPL's market cap is closing_price x free_float_outstanding_shares. But that's not the REAL MARKET CAP. Because the number of outstanding shares is OLD AS FUCK. When the latest number comes out, the market cap changes instantly. And ETFs start moving, and hedges start being changed, and so on.
"But ETFs won't change the number of shares they hold, they will still hold the same % of AAPL in the index" - random_wsb_autist
Oh my fucking god you're dumb as fuck. FLOWS change. And the next day, when TQQQ comes by and puts its massive $18b dong on the table, the market will hedge that differently. And THAT CAN BE PREDICTED. That's why AAPL was exactly at $316 1 hour after the market opened on 1/31.
So, what can you use to spot moves? Let me show you:
Market topped on 2/19. Here’s SPY. I even marked interesting dates for you with vertical lines.
Nobody could have seen it coming, right? WRONG AGAIN. Here:
In fact, JPYUSD gave you two whole days to see it. Those are NOT normal JPYUSD moves. But hey maybe it’s just a fluke? Wrong again.
Forex showed you that all over the place. Why? FLOWS MOTHERFUCKER FLOWS. When everything moves like that, it means the market needs CASH. It doesn’t matter why, but remember people pulling cash out of ATMs all over the world? Companies drawing massive revolvers? Just understand what this flow means.
But it wasn’t just forex. Gold showed it to you as well. Bonds showed it to you as well.
Even god damn buttcoin showed it to you.
And they all did it for 2 days before the move hit equities.
Chapter V. LIQUIDITY NUKE INBOUND
You see all these bankruptcies that happened so far, and all the ones that are going to follow? Do you think that’s just dogshit companies and it won’t have major effects on anything outside them? WRONG.
Because there’s a lot of leveraged instruments on top of those equities. When the stock goes to 0, all those outstanding puts across all expirations get instantly paid.
Understand that Feb-March was a liquidity MOAB. But this will end with a liquidity nuke.
Here’s just HTZ for example: $239,763,550 in outstanding puts. Just on a single dogshit small-cap company (this thing was like $400m mkt. cap last week).
And that’s just the options on the equity. There’s also instruments on etfs that hold HTZ, on the bonds, on the ETFs that hold their bonds, swaps, warrants, whatever. It’s a massive pile of leverage.
Then there’s also the ripple effects. Were you holding a lot of HTZ in your brokerage margin account? Well guess what big boi, when that gaps to 0 you get a margin call, and then you become a liquidity drain. Holding long calls? 0. Bonds 0. DOG SHIT!
And the market instantly goes from holding $x in assets (HTZ equity / bonds / calls) to holding many multiples of x in LIABILITIES (puts gone wrong, margin loans, derivatives books, revolvers, all that crap). And it doesn’t matter if the Fed buys crap like HTZ bonds. You short them some. Because when it hits 0, it’s no longer about supply and demand. You get paid full price, straight from Jerome’s printer. Is the Fed going to buy every blown up derivative too? Because that's what they'd have to do.
Think of liquidity as a car. The faster it goes, the harder it becomes to go even faster. At some point, you can only go faster by driving off a cliff. THE SQUEEZE. But you stop instantly when you hit the ground eventually. And that’s what shit’s doing all over the place right now.
And just like that fucker, “I’m standing in front of a burning house, and I’m offering you fire insurance on it.”
Now is not the time to baghold junk. Take your cash. Not the time to buy cheap crap. You don’t buy Hertz. You don’t buy USO. You don’t buy airlines, or cruises, or GE, or motherfucking Disney. And if you have it, dump that shit.
And the other dogshit that’s at ATH, congrats you’re in the green. Now you take your profits and fucking dump that shit. I’m talking shit like garbage SaaS, app shit, AI shit, etc. Garbage like MDB, OKTA, SNAP, TWLO, ZM, CHGG etc.
And you dump those garbage ass leveraged ETFs. SQQQ, TQQQ, whatever, they’re all dogshit now.
The leverage MUST unwind. And once that’s done, some of you will no longer be among us if you don’t listen. A lot of leveraged ETFs will be gone. Even some non-leveraged ETFs will be gone. Some brokers will be gone, some market makers will be gone, hell maybe even some big bank has to go under. I can’t know which ones will go poof, but I can guarantee you that some will. Another reason to diversify your shit. There’s a reason papa Warrant Buffet dumped his bags, don’t think you’re smarter than him. He may be senile, but he’s still a snake.
And once the unwind is done, THEN you buy whatever cheap dogshit’s still standing.
Got it? Good.
You feel ready to play yet? Alright, so you catch a move. Or I post a move and you wanna play it. You put on a small position. When it’s going your way, YOU POUND DAT SHIT. Still going? Well RUSH B CYKA BLYAT AND PLANT THE GOD DAMN 3/20 $30p BOMB.
Chapter VI - The mouthbreather-proof play - THE AKIMBO
Still a dumbass that can’t make a play? Still want to go long? Well then, I got a dumbass-proof trade for you. I present to you THE AKIMBO:
STEP 1. You play this full blast. You need some real Russian hardbass to get you in the right mood for trading, cyka.
STEP 2. Split your play money in 3. Remember to keep extra bankroll for POUNDING THAT SHIT.
STEP 3. Use 1/3 of your cash to buy SQQQ 9/18 $5p, pay $0.05. Not more than $0.10.
STEP 4. Use 1/3 of your cash to buy TQQQ 9/18 $20p, pay around $0.45. Alternatively, if you’re feeling adventurous, 7/17 $35p’s for around $0.5.
STEP 5. Use 1/3 of your cash to buy VIX PUT SPREADS 9/15 $21/$20 spread for around $0.15, no more than $0.25. That is, you BUY the 21p and SELL the 20p. Only using Robinhood and don’t have the VIX? What did I just tell you? Well fine, use UVXY then. Just make sure you don’t overpay.
Chapter VII - Quick hints for non-mouthbreathers
Quick tips, cuz apparently I'm out of space, there's a 40k character limit on reddit posts. Who knew?
Good luck. Dr. Retard TQQQ Burry out.
Spread betting is a derivative strategy, in which participants do not own the underlying asset they bet on, such as a stock or commodity. Rather, spread bettors simply speculate on whether the Spread betting explained Spread betting simply allows you to speculate on whether the price of an asset will rise or fall. You can gamble on everything from shares and commodities to stock market Spread betting is essentially betting on an outcome. It is used for events such as sports, the stock market, house prices, the FTSE 100 etc. However unlike normal betting when you either win or lose, spread betting allows you to win and lose small and big amounts. Unlike traditional share dealing, if you believe a market will fall in value, with spread betting you can sell a market and profit from the falling prices. When you open a trade, click sell, this is known as 'going short'. For example, Tesco is trading at 229. Spread betting (sometimes referred to as spread trading) is a way of trading the financial markets without ever having to purchase stocks or shares. Traditional investment in shares involved calling up your stock broker or opening up an online share dealing account and buying x number of shares at a certain price.
[index]          
Morning Market Prep Stock and Option Trading Read the Morning Blog Here: https://bit.ly/3epuHsI Morning Market Prep is and unbiased evaluation of the major stock market indexes to help stock and ... Does a stock split make a better investment? A stock split is associated with successful companies although that is not always the case. Related Videos What is a Stock Split? Why do Stocks Split? 🤘 Options Talk 7: Views on Market by AP and Mechanics of Calendar Spread by Raghunath #OptionsTalk #Opstra #Definedge #TradePoint For Free Online charts: Opstra.definedge.com Tradepoint.definedge ... How to Win at Spread Betting - https://amzn.to/2EmO0Uk ... Wirecard Explained Stock Market Wirecard Scandal ... READING CANDLESTICKS & CHARTS CORRECTLY ViralVideos Investment & Stock Market 222 ... In this video David explains a simple way of finding low risk high probability trading opportunities that are suitable for spread betting.