Brief Epilogue – 2/18/22

Brief Epilogue – 2/18/22

About all that can be said today is that the market worked its way lower methodically and wedged into the Weekly Expected Move low, where a short-covering rally ensued. Then those who wanted to pair back their long positions for the weekend sold the rally around 4375, and we closed back near the lows of the day.

The positive Gamma associated with rolling puts in the expiration today likely slowed the downside pressure but did not overcome it. The market closed with many puts still outstanding and the put/call ratio still over 1.0. Tuesday will be interesting as participants will come into the market with no relief from the high volatility and negative Gamma exposure.

Today, the market failed to tag any of our downside targets, as the Weekly Expected Move low stopped the decline before reaching them. So those targets remain open.

I wish I had better news for those still in this market. The swing low we seek to deploy cash for our strategies remains elusive. At least day traders picked up a nice short-covering rally.

Have a great holiday weekend.

A.F. Thornton

AF Thornton

Website: https://tradingarchimedes.com

A.F. "Arthur" Thornton is an expert in logic, risk/reward quantification, market fractals, pattern recognition and asset class behavioral analysis with 34 years devoted to developing algorithmic and quantitative trading systems. In addition to trading his own capital, Mr. Thornton designs custom algorithmic and quantitative trading systems for a small and exclusive group of exceptionally qualified traders.

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