Opening Indications

Like most op-ex Friday's that tend to open and linger near Thursday's close and despite the Citadel (probable) SPX futures ramp, all average have fallen and are trading near unchanged from yesterday with a bit more weakness in the Dow, which is classic Friday op-ex pin behavior (whether standard or weekly options).

I suspect yesterday's successful attempt to hold the market in place rather than let the SPX slip below first major support at 1991, probably has more to do with op-ex in the immediate near term than it does with a head fake move.

What I am seeing, even though this is early a.m. trade which is full of games, so much so many professional traders won't even start their day until 10:30 -11 a.m. after the a.m. games (tagging limits and such) passes, I'm still seeing quite a bit of sharp deterioration a lot faster than we saw yesterday. My first inclination was it was likely to bring prices in line with the op-ex max-pain in which seems to always be very close to Thursday's close. My second inclination was that this may also have something to do with squaring up positions, taking some risk off the table as the UN security council met yesterday after NATO released satellite imagery of Russian artillery, encampments, main battle tanks and supply vehicles in side several areas of Ukraine territory and several others just several kilometers outside Ukraine territory, all set up in formation and pointed to the north where the only possible outcome could be the shells landing inside Ukraine so it's apparently not a drill. This has caused NATO to call an emergency meeting later today.

With a 3-day (US holiday) weekend coming up and escalating tensions, many investors won't be keen about holding positions over the long weekend, at least not without some serious hedges on.

The point being, although it's early, I'm certainly interested to see if this increased rate of negative 3C disposition is related to either situation mentioned above or if perhaps there's something larger in play which as I said yesterday would be my lowest assigned probability (skipping a head fake move and just allowing a rounding top to roll over).

In the case of the reversal process, today's early action so far (price only) has maintained and continued a very nice looking, proportional reversal process.

I'll give the 3C signals a little more time since the market is at the or near the unchanged op-ex max pain levels, perhaps they'll mellow out a bit. If they continue on the course they've been on so far this morning I'll be forced to consider more drastic steps and perhaps a change in the outlook although it's very difficult to say whether market deterioration is true rolling over without a head fake or whether it's investors taking some risk off the table with a long 3-day weekend in an environment of heightened geo-political tension.