Before we head into our long Independence Day weekend, we have to kick off the third quarter. Today was a volatile day that featured a gap down, continued selling, a reversal all the way green, and then a close lower.
Today’s session definitely had a yo-yo type feel to it.
Overall, I am very pleased with how we prepared for this week. Let’s recap.
June Moon Substack
June Moon Substack
This morning, I entered into the session knowing I wanted to exit the puts I had entered this week as I was content with the 393 to sub 375 sell.
Then executed with a long fill on SPY 7/15 395c within 0.02 of the LOD (low of day).
From the entry today, 395c was never in the red. The returns after entry went as followed;
30 mins: +7.9%
1 Hour: +29.36%
90 mins: +47.6%
2 Hours: +50%
150 mins: 95.2% (HOD)
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In this substack I plan to discuss the new bullish positioning I discussed in last weekends substack. Will it be enough to start Q3 green?
Before we get to the data, seasonality says;
July Debut GIF
The Most Bullish Day of the Year
If you were hoping for some more bullish action and you are a fan of seasonality, boy do I have something for you. The first trading day of July happens to be one of the most bullish days of the entire trading year.
Since 1994, the first trading day of July has been green 89.28% of the time.
In other words, in the last 28 years the SPY has closed higher on the first trading day of July 25 times. The only years the SPY did not close higher on the first trading day of July were, 2002, 2004 & 2010.
However, one thing that’s different about this year is 2022 is a midterm election year. Could this have an impact on Q3 start?
Of the 7 midterm election years during this 28 year span
2 of the 7 were red 2004, 2010.
5 of the 7 were green
1 of the 3 red July debuts did not occur during a midterm year
Goldman Sachs would certainly be quite thrilled if the July debut trend were to continue as it’d make their call of July 1-17 seasonality be off to a hot start.
New Option Positioning SPY
We went into this week with the mindset that IF
We sold off this week AND
We were to have early July bullish seasonality THAT
New bulls would aggressively attack today on a pullback.
The good news the bulls we were hoping for on the 7/15 call chain showed up. Will this new born bull flow be enough to propel us higher? Let’s dive in.
