Morning Notes – 3/21/2022

Good Morning and Happy First Day of Spring:

• Looking at our array of choices, let’s peg 1st support at 4420, then 4400 (our key pivot line discussed in yesterday’s Weekly Oracle).
• Key resistance sits at 4471 and then 4500.
• Our sandbox for the expected move today ranges from 4420 to 4500, though I suspect that volatility will vary closer to 36 points up or down from the open.
• I am looking to buy dips over selling rallies.
• All else being equal, I try to acquire longs in the green zone and sell them in the red area.
• Don’t forget the opening range trade if it presents.
• Despite last week’s significant bounce, the large gamma strikes are predominantly put positions.
• Gamma at call strikes start to increase above 4400, but those call positions need to increase markedly to offer real market support. 
• Data from last week suggests that call buying was rather anemic.
• Volatility has contracted somewhat but still reflects inflation and Ukraine conflict tail risk. I still believe we are rallying towards a cease-fire and agreement, and then we see what happens from there.
• Overnight inventory is balanced and shows good support at 4440. The futures achieved a marginal new high, but the price is back into Friday’s range at this writing.
• There is nothing to guide us for an opening trade. Let the market settle in a bit.
• While 4400 is the key pivot, I want to see price hold above Friday’s halfback at 4420. Otherwise, I shift to neutral.
• Morning charts are available to subscribers.

Be careful as dealers and market makers are still adjusting their books this morning which could lead to some random price action.

A.F. Thornton