Quick market update of Aug 1st 2024 so far

To say Aug 1st 2024 market is eventful is an understatement so far,

to give the quickest update possible,

I will skip the usual charts and attach charts with the highest relevant factor as time is of the essence here,

Market internals

based on market internals, the D/A ratio is not very lop sided for both NYSE and Wall street, yet for every selloff happening, it has been occurring at a higher volume than market rally day ( if extra attention is paid to it )

and especially for Nasdaq,

D/A ratio of 3.2 to 1 is a serious level which require extra caution (3240/1012)

undoubtedly this market plunge is caused by 2 factor

factor 1: USDJPY and Nikkei

Yen strengthening is causing unwind in the yen short, Yen is a funding currency due to years of near zero interest rate. the Japan finance ministry want yen to strengthen to alleviate imported inflation. This is causing unwind in Yen, which act as liquidity vortex sucking out the lifeblood/money chip from every large institution pocket. market will not recover until Nikkei recover.

Factor 2: growth concern

there’s a growing growth concern, 10Year treasury yield is falling

As a result, there’s increase in hedge for tail risk bet,

NDX gamma exposure charts

Puts are being bought as far as 17000 ( for several days), and dealer has to hedge and sell in the same direction of the market, causing volatility

SPX gamma exposure charts

Puts are being bought as far as 5300 ( for several days), and dealer has to hedge and sell in the same direction of the market, causing volatility

Tonight NFP could cause more volatility if employment figure is 2 standard deviation away to the downside from street expectation.

A more comprehensive market review to be posted over the weekend.

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