with this type of action, the market kills the bull stops and runs up during night session, then everyone ends up paying a premium, to get back in.
Another bearish close.... remaining short. 1448.50-1450.50 is basically the bulls last chance... wouldnt be surprised to see it tested tonight and broken for a move down to 1425-1430 by tomorrow or wednesday.
Aren't you taking a big risk. I don't trade options and I don't have access to modeling software, but what if ES fell 70 points (about 5%). Wouldn't you be stuck with VIX up to around 32 and a 150 point loss? What would you have done?
Me too. I went short at the right shoulder at 1465.25 and am holding my short into AH, where we just went below the RTH LOD.
70 handle loss at 35% vol on the 1225P = ($22,500) 70 handle gain on futures = $17,500 Projected loss: ($5,000) Actual gain: $12,750 Win of 2.5x a projected 70-handle hit for a 3 day hold.
my risk dynamics, which aren't measurable except media screening, and general feel indicate that for a large position trade to be long. sentiment in this market turns on a dime, if you look at what we just went through in the markets, its very similar to shock waves of the past. and if you look at what has happened from similar shockwaves, the market went up first and asked questions later. Meaning the projected economic slowdown, the market will rally first, and look for evidence of the slowing. Its the easiest thing for the MMs to do. Now that abberant orderflow is less, the MM's have a better handle on things.
1452 ES is where it is at those selling right now are doing it with a 6 point premium from the cash close. Seems brave to me to be shorting here. My analysis shows a move up to ~1482-1485 on ES sometime this week.