So, the bigger picture gameplay is really starting to come together. We have to keep in mind that we just rallied 3% off a low, so expect some fighting to happen. The nice part is that I don't expect much fighting into tomorrow, a Friday, as I don't think the weekend risk is anywhere near what it was let's say back in May.
Do not believe the narrative that "everyone is bullish", because they are not. On net, dealers are short a lot of gamma and need to hedge because of how much crash protection was bought in the last few trading sessions. Nevertheless, lets keep it simple. With this week's pending close, this is a breakout of the weekly range projection level and we are targeting 413 on the monthly SPY up level before the end of September.
All of these buys, we will scale then. I am getting out for graceful exits on the run up just in case it falls lower, but just enough scaling so that if we break below this week's low we will still be positive from a PNL perspective.
I had a few inquiries from clients today regarding natural gas and if it is the time to start buying dips for a real run up. I can understand the risk-reward, look at the daily UNG chart
A 9 buy setup off trend line break projection targets. From a technical perspective, this is clean. It is hard to argue anything otherwise. When we shorted energy names earlier this week, I expected a bigger drop. I will be watching natural gas carefully because it is a big barometer for our big picture SPY idea. If you see it break below this week's low, I would not bother getting involved on the long nat trade. It is way too crowded and people forgot that violent down breaks can be.