Heads up leading into FOMC
Options positioning suggests we should have some volatility either way
Just a quick post for free subs, today we have the FOMC at 2pm EST/11am PST.
Here’s what I’m seeing in the options market:
1) Options market positioning suggests a large move in either direction
2) SPX key res = 4430 and key support = 4305. Impulsive breaks of these levels = hold onto your seats.
3) Puts are expensive relative to calls, so positive news creates skew for massive rally.
4) Negative gamma in the markets (i.e. market being short options) = fuel for massive sell off if FOMC disappoints
All of this is to say anticipate large swings and likely elevated levels of volatility heading into the Friday op-ex.
I’ll do a technical analysis piece for paid members later today after the close sharing my trade ideas for the end of the week, so you can subscribe below to see trade ideas and analysis.
Until then, keep risk light until we have established the next overall direction.
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