Good morning.
Asian markets closed deep in the red, with the Nikkei down 1.9 percent and the Hang Seng down 2.5 percent, while over in Europe the Euro Stoxx 50 is down 1.0 percent and the S&P 500 is down 0.9 percent at 3880 points in the US
In general markets remain concerned that the Fed might push the US into a recession due to their hawkish rhetoric, and possible tax increases and declining exports to China in Japan. In a positive development Shanghai's vice mayor said that the city's port has resumed most work.
In the US the Philly Fed Manufacturing Index crashes to 2.6 points vs 17.6 previously and 16 forecasted, while Initial Claims jump to 218K from 197K.
In terms of geopolitics it is speculated that North Korea might conduct a missile test when President Biden visits and China is apparently in talks with Russia to Buy Oil for strategic reserves.
Gamma discussion:
Dealer gamma register -1290MM, while gamma inversion remains at 4285.
Overnight data shows large increases in put open interest across the board (see chart below) as suggested by yesterday’s high put activity at those strikes.
We see support at 3900/3850, while 3900 is a resistance level now. Dealer selling should abate between 3800 and 3750.
Asian markets closed deep in the red, with the Nikkei down 1.9 percent and the Hang Seng down 2.5 percent, while over in Europe the Euro Stoxx 50 is down 1.0 percent and the S&P 500 is down 0.9 percent at 3880 points in the US
In general markets remain concerned that the Fed might push the US into a recession due to their hawkish rhetoric, and possible tax increases and declining exports to China in Japan. In a positive development Shanghai's vice mayor said that the city's port has resumed most work.
In the US the Philly Fed Manufacturing Index crashes to 2.6 points vs 17.6 previously and 16 forecasted, while Initial Claims jump to 218K from 197K.
In terms of geopolitics it is speculated that North Korea might conduct a missile test when President Biden visits and China is apparently in talks with Russia to Buy Oil for strategic reserves.
Gamma discussion:
Dealer gamma register -1290MM, while gamma inversion remains at 4285.
Overnight data shows large increases in put open interest across the board (see chart below) as suggested by yesterday’s high put activity at those strikes.
We see support at 3900/3850, while 3900 is a resistance level now. Dealer selling should abate between 3800 and 3750.