Charm — Trading Ideas on TradingView

If we crash it will look like this.JHQTX and OPEX Window of Weakness 1. Vanna and Charm Flows gain strength 2. VIX Print for the month 3. Window of Weakness Options and Vol are entering in a very fragile time when flows can be at their technical weakest. When social media start speaking about goldilocks (economy goes not to hot, not to cold). That could be this months OPEX (Options Expiry). A slow grind higher into CPI is likely due to well supplied vol leading up to the event. But CPI is likely to be a catalyst into VIX and OPEX prints. My outlook is that anything above the 20D is a buyable dip right now. If dealers Gamma Exposure suddenly moves negative before CPI and Vix Expiry I will be the first to clang the cow bell. There are 3 big hedged equity funds I monitor from JPM and JHQTX is the smallest of the three, which means technical flows from this fund are the weakest of the monthly rolls. Flows from JHEQX (largest fund) and JHQDX (middle fund) are stronger 20 days before expiration as Gamma becomes a bigger factor and IV that spikes from a weak VIX print into OPEX bleeds off into end of month expiry options like our HEFS. Months that JHEQX and JHQDX pin the market to a certain expiry with supportive flows, JHQTX tends to be the runt of the litter because it always ends up coming in short. The weakest point in markets will be Feb 15th - 28th. The next weak spot would be May 17 - 19

Vanna Flows Returning for End of Month It seems VANNA/CHARM are back from vacation! Hedges are likely piling in as Jackson Hole approaches. Lots of reflexive moves this week while the markets are standing on eggshells waiting for Powell. You know the routine! I doubt any direction will come until CPI on Sept 13. Until then. Chop Chop, Maybe a little Drop.

Luke, Use The Flow Do you hear nothing that I say. But moving a single stock around is one thing, moving the entire market is totally different. No, No Different, Only in your mind. You Must Un-Learn what you have learned. Alright, I'll give it a try No, Try Not. Do, Or Do Not. There is no Try I Can't. The Market is too Big. Size Matters Not. Judge me by my size do you, hrm? Where you should not. For My Ally is the Flow, and a powerful Ally it is. QE makes it grow. Its Liquidity Surrounds Us. It Binds Us. You Must Feel The Flow Around You. Here between You and the Qs, The Dow and the Rusty. You want the Impossible. Following up from my previous chart. I wanted to illustrate the VANNA and CHARM flows and how BOTS and EU traders front run the strong VANNA and CHARM flows. VOL UP, Selling Futures Overnight. VOL DOWN, Buying Futures Overnight. JULY 13AM is Vixperation that opens a Window of Weakness. This type of front running let to the 19th DIP from last year if some of you remember my By The Dip Trend Ideas

15 Minute Technical Today Big fan of FinTwit and 15 minute VIX. Falling Wedge Reversal Pattern StrizziJ Calls out the top this morning on Tue 15min. Cem Karsan (Jam Croissant) explains in a tweet in January that these are Vanna Flows. Vol down every day means buying indices overnight. Vol up means selling overnight. Vanna/Charm flows are hedged by banks & naive primary dealers on the open of US trading & into close. He further points out that Algos & European traders front run these flows starting around 1am CST to sell on US Open. Cem believe the excess risk adjusted returns are 100% a result of captive Vanna/Charm flows… Cem also posted in a tweet on Monday about an upcoming window of weakness in Vanna/Charm flows. Direction after July 13AM? Likely a lot of CPI pain to come. Oil is a big issue at G7. Burry is calling for a Bear rally before the big siesta. Bears gotta eat before hibernation.

Looks like Gary had lots of bananas this week There was not much movement in s&p this week as I anticipated it was a very tight accumulation. The reason I drew the blue accumulation lines was based on Cem Karsan (Croissant) support/resistance levels from the previous week. This chart I tried to put Croissant levels onto a SPY chart. The weekly / daily levels are scary accurate as you can see the regression trend I set in this chart is only for Monday Open -> Tuesday Open. The median for Monday-Tuesday open is almost pinned exactly to close of markets Friday. To understand why the markets are behaving the way they are, Sergei Perfiliev released a video this week www.youtube.com that helps the less technical understand what Cem Karsan levels and his S&P modeling really mean. What Karsan means that Gary has his bananas is that thier is plenty of options liquidity (delta hedging) providing gary (the market makers options dealer). It basically means we're going to slowly grind higher until prince charming returns. The reason why volume is so low is that there is plenty of liquidity in options that market makers don't need to move (sell or buy) as much of the underlying to remain delta neutral. Who is Prince Charming? Charm is the change in Delta with respect to the passage of time. The thing with options markets is that as options near expiration this rate of change increases quickly. Aug 6 tweet thread from Karsan was a cryptic poem that he later re-tweeted this past Wednesday. My interpretation of his prince charming thread is simple. We're stuck in what he calls the after gamma. Never ending call squeezes. Which means big money is buying the dip with call options into a sell off that will eventually whipsaw back the other direction as market makers hedge (buy underlying) the call delta. This chart I did 2 weeks ago is a perfect example of the call squeeze whipsaw we saw the last Buy the Dip 19th. It was right before Karsan tweeted about never ending call squeezes. He retweeted the same tweet thread Sept 1st, so my expectation is that we'll have another similar buy the dip this next Vix / Opex.

MNST 2nd times the charm Gains? This time it better have bottomed out and now it goes marchin on! We're marching on! right up and up!