Now comes the weekly
Premarket commentary for May-19, 2023. Elaborated by the Point-Blank Trading team. Gamma data and charts from @TradeVolatility.
REVIEW
Yesterday, after the announcements of a possible way out of the debt ceiling problem, there were record purchases of calls.
The closing statistics show this with an unusual total P/C ratio reading of 0.8 and a very low equities-only P/C ratio of 0.65.
VIX p/c ratio reached a perhaps record reading of 0.23.
Surprisingly OEX (SPX 100 index) ended with a not so optimistic reading of 3.73, and miniRUT of 3.76.
The Gamma squeeze experienced yesterday afternoon that took SPX to 4200 is understood.
GTH
Global Trading Hours premarket activity shows that SPX call options are outpacing puts on the CBOE. Notable among the most active is the call activity for the August-18 expiration hitting strikes from 4350 to 4550.
At the CME the ES, SPX futures, options activity shows puts and calls are almost even with a Put/Call ratio of 1.058
Overall, traders seem to be leaning on the bullish side today.
Box Trading Market Map
The maket map with levels for today’s trading is here.
Our old faithful market map shows that after struggling several days with the downtrend line, the SPX finally managed to break above it two days ago, but it also shows that the SPX closed at a very important resistance level. Price will struggle to move higher today, and may eventually pull back.
GAMMA
Gamma is mostly positive with an accumulation of call Gamma between 4200 and 4125. 4175 will be support and 4225 resistance. Price is in positive Gamma regime, Flip point (Zero Gamma point) is at 4157.5
Open interest shows most of calls are above 4180 and shows large call positions at 4200, 4220 and 4225.
4225 is the main resistance today. There is the possibility of the market closing below 4200.
Have a nice trading day.