To The Moon

Major U.S. indexes fell again on Friday, capping a dreadful week for equities in the wake of rising interest rates around the world.

The Dow Jones Industrial Average fell 486 points, or 1.6%, on Friday to close at its lowest level since Nov. 20, 2020. The index avoided closing in bearish territory by about 150 points. $DJIA(.DJI)$ 

The S&P 500 fell 1.7% to fall 4.7% on the week. The benchmark has fallen for five of the past six weeks. $S&P 500(.SPX)$ 

The Nasdaq Composite fell 1.8% to cap a weekly decline of 5.1%. This is the worst two-week period for the tech-heavy index since the week ending March 20, 2020. $NASDAQ(.IXIC)$ 

 Oil prices also fell below $80 a barrel, the lowest since January...

 The yield of the 2-year Treasury close to 4% and that of the 10 years above 3.5%...

Overall, rising rates would scare the stock market. We now fear that the economy is entering a recession.

From a technical point of view:

S&P 500 would threaten its June 17 low. Level that would be considered support.

 The first resistance would be at 3800.

From a slightly more complex point of view, in which I study the market:

We have a pronounced short gamma context.

The demand for puts is strong and would be at an "extreme" level.

Without going into details, we could have a bunch of ITM puts on the 3600-3700 levels.

This is my interpretation, not a buy/sell recommendation.

Thanks for reading.

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