Just as we predicted with options flow and positioning, mark...

Just as we predicted with options flow and positioning, markets made their first red week close after we predicted the blow off top since april.

This market is controlled by structural flows instead of fundamentals which many thinks.

Last week we warn about how options flow has shifted and we are going to see some weakness.

Summer is always volatile due to lack of liquidity and this time is no different, except we have TGA sucking out liquidity from the markets with refilling of the accounts. Some say RRP will fill that gap, but we have seen how RRP only absorbed about 50% of the auction. The other 50% are by banks who are forced participants.

This will result in poorer earnings for banks as they get squeezed out of reserves further when its already very tight due to QT and huge rate hikes. Which is why Yellen is warning us of the poor bank earnings we are about to see. But bulls still think markets fundamental is fantastic due to the rally which is actually all due to market makers positioning.

Has the next leg started? Or are we only in a pullback? I explained more in details with technical indicators to show you as well. So watch it and be prepared for whats coming in the next 1 month. We have been crushing the markets every week as shown here because we are prepared for whats coming.

As always, trade safe and invest wise!

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