{"id":1490909,"date":"2024-09-19T16:58:57","date_gmt":"2024-09-19T20:58:57","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1490909"},"modified":"2024-09-19T16:58:57","modified_gmt":"2024-09-19T20:58:57","slug":"why-stocks-are-melting-up-a-real-time-peek-below-the-markets-surface","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/why-stocks-are-melting-up-a-real-time-peek-below-the-markets-surface\/1490909\/","title":{"rendered":"Why Stocks Are Melting Up: A Real-Time Peek Below The Market’s Surface"},"content":{"rendered":"

Why Stocks Are Melting Up: A Real-Time Peek Below The Market’s Surface<\/span><\/p>\n

\n

Next week, our friends at SpotGamma are launching an extremely useful trading dashboard called Trace<\/a>, which will bring Wall Street-level analytics to ordinary traders: analyzing dealer gamma exposure on a minute by minute basis,<\/strong><\/em> the application will provide real-time insight on key market levels, including zones of support, resistance, and volatility, <\/em>hinting at potential breakout <\/em>or breakdown <\/em>levels, and warning of potential major moves in the immediate future.<\/p>\n

Here is an example of what to expect.<\/p>\n

As SpotGamma<\/a>‘s Brent Kochuba notes, post-FOMC we find the S&P in a very unique position: negative gamma to the upside.\u00a0\u00a0 <\/strong>This implies that the big positions are traders long SPX calls, which places dealers in a chasey, negative gamma stance <\/strong>(hence today’s meltup).\u00a0<\/p>\n

As regular readers are aware, negative gamma implies dealers are buying futures as the SPX moves higher (and alternatively selling or shorting when the SPX drops). Clearly yesterday\u2019s FOMC & its 50 bps cut has equity momentum focused on the upside, with a big target at 5,750.<\/p>\n

Negative gamma (red) is depicted in the SpotGamma Trace map below, which uses a proprietary dealer positioning estimate to forecast SPX dealer hedging flows. Currently we model dealers having large short call positions at 5,675 & 5,800, which can be seen as red strikes on SpotGamma\u2019s Trace map (left side).<\/strong><\/p>\n

SourceTrace<\/a><\/em><\/a><\/p>\n

For today, 5,750 is a short term area of \u201clocal\u201d positive gamma<\/strong>, which is depicted in blue. Note that the blue is concentrated into 4PM, but disappears post-4PM. This is because the material positive gamma for today is driven by 0DTE positions, which expire at the close.<\/p>\n

Looking ahead, this upside equity momentum plays into a massive 9\/20 triple witching expiration. <\/strong>Into Friday & Monday, this expiration could force the closing and rolling of long call positions, which could temporarily stall upside equity momentum. <\/strong><\/p>\n

Fast-forwarding from this morning, a mid-day update shoes that a band of positive <\/strong><\/em>gamma emerges above 5,700, which implies market support at that level. As SpotGamma notes<\/a>, much of this positive gamma was driven by 0DTE positions \u2013 including a 4k lot 0DTE call seller at 5,735.<\/strong><\/p>\n

These supportive dealer positions are showing the SPX tracing a path up into 5,735\u00a0 for the close <\/strong>(which is the white zone on the chart at 4pm ET).<\/p>\n

SourceTrace<\/a><\/em><\/a><\/p>\n

What is unique about Trace <\/a>is that unlike SpotGamma’s previous offering, which showed intraday Delta flow, we can now add a layer of dealer gamma as it also changes in real-time, <\/strong>which to many advanced traders is the holy grail of flow analytics.<\/p>\n

<\/a><\/p>\n

We will be watching Trace closely to see how positions shift into and out of OPEX, as we continuously update positions throughout the trading day(s).<\/p>\n

Readers who want to get an advance look at the features of Trace, which will be officially launched next Tuesday, can do so at SpotGamma’s website here<\/a>.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nThu, 09\/19\/2024 – 12:58<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/why-stocks-are-melting-real-time-peek-below-markets-surface<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Why Stocks Are Melting Up: A Real-Time Peek Below The Market’s Surface Next week, our friends at SpotGamma are launching an extremely useful trading dashboard…<\/p>\n","protected":false},"author":0,"featured_media":1490910,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-1490909","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbimBl-6fQV","jetpack_featured_media_url":"https:\/\/bugaluu.com\/news\/wp-content\/uploads\/sites\/3\/2024\/09\/trace201-3tcMcE.png","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1490909","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1490909"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1490909\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1490910"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1490909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1490909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1490909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}