ESZ0 Trade on Oct 26, 2020 15:32 from Marius: Tradervue User Stock Trades.

Markets gaping lower from the previous week. All sectors looking weak with VIX getting over and holding over 30. Covid 19 cases increasing into the flu season, not stimulus agreement, elections one week away, & many earnings reactions subtle. There are mega cap tech earnings this week, more heavier on Thursday.

Trade plan here was to capture the downside momentum seeing major key inflections broken on the indices but on the shorter-term into Wed knowing ER catalysts into the second half of the week. GDP report out Thursday and MSFT earnings tomrrow. NQ would see more of a rise if earnings report well and market finds buyers. Trading ES factoring that risk. Will be anticipating a follow up trade position in either direction as the week ends. Also exiting some mid-term positions in the mid-term account because there is more risk to the downside than upside at this point.

Intraday Fundamentals

RVOL 1.257
AVOL 1.529M
ATR 62.63

Options Statistics

SI 8.898
IV 33.49%
IVP 20%
P/C Ratio 1.788
VWAP 3395.587

Noting heavier put option activity signaling more downside protection interest.

Options Position Metrics

OI 420
Vol 978
Delta .03
Theta -.49
Vega .20
Gamma .00

Making note of EOM options expiring this Friday. Did not trade that contract because of multiple ER's catalyst risks. 3450 + 3500 seems to be an area of higher interest in the EOM expiry contracts this Friday. On the put side it's 3300 + 3200 with even more OI.

Tape Reading

Noticed the early heavy call writing in the 3400's. Large put buying as well in the 3200's.

Technical Analysis

Flush below key 3400 HTF inflection level. Similar in NQ and many sectors continuing with lower lows. VIX notably elevated with momentum and options markets pricing in more protection and volatility. Lower anchored vwap's currently holding as support/demand. Anticipating higher anchored vwap to hold as supply/resistance in the mid-term if LL's continue.

Trade Review

Trade executed and closed as planned. Markets continued to sell off critically below HTF breakout levels. VIX at 40 which is higher than the previous sell off in September. Technically this could potentially lead to more downside velocity. Major fundamental catalyst is the rising Covid-19 cases and elections uncertainty. This was also a key HTF level, so breakout buyers are underwater and or selling. All leading sectors with elevated selling volume and close at low of the day, however futures with a bid up thus far overnight.

Will be tuning in on the Q3 GDP report + reaction and earnings for the mega caps tomorrow. More risk in any trade at the moment for the next couple days into elections. Staying open minded and keeping in mind the price action back in 2016 when it was a market dip and rip set-up. Lot's of capital on the sidelines and liquidity is thinner. More downside risk for the time being.

Keeping note in the future as I develop to place more size if possible in these trades to also add as an additional hedge to the longer-term portfolio. Mid term portfolio positions have been exited with a small loss couple days prior scaling out but avoided today's risk as planned.

Grading this trade as an A and will be continue to place these market play trades in the current market regime. The strikes chosen was closer but was able to do so recognizing the momentum, key levels, supply/demand flow, & sentiment/psychology of the markets.