Forecast for the US market for the second half of April 2022

11.04.22

In my opinion, the fuel for the broad trending moves in the US market over the next two weeks will be volume in SPY put options with an expiration date of April 14th. The next large volume puts will expire on May 20th and June 17th. By April 14th, 3 million put options should be expiring in SPY:

Sum calls-puts open interest SPY April 2022

In an option series expiring on April 14, the ratio of puts and calls is as follows:

Sum Calls - Puts open interest series 14 April 2022

By strikes, the volumes in this option series are distributed as follows:

Calls - Puts open interest April 14 2022 strikes

In general, for all option series, we see a significant predominance of open positions in put options in SPY:

Total calls puts SPY 11 April 2022

I expect there will be a drop from the 450 level. I expect a drop from April 11th to 14th and then a rise from the 435-430 levels after April 14th. Put options will close, and hedging positions in the SPY ETF will close accordingly. This may encourage upward movement. My guess is that in late February and the first half of March, market makers sold large volumes of put options and the uptrend in the second half of March is due to the delta and gamma hedging of these positions. As long as the market is dominated by open positions in put options, we will see fairly wide trend moves. Now the maximum volume in puts is open at 430. It is quite possible to expect a downward movement to this level, and after April 14th an upward movement from this level:

Calls - Puts open interest strikes 11 April 2022

Most likely, in the next two weeks we will see the following market movement:

Forecast for the US market for the second half of April 2022

21.04.22

The nearest resistance level in SPY is $455. Open interest in SPY for the next 30 days:

OI SPY 21.04.22 30 days

Around the $450 level, there may be increased volatility due to comparable volumes in calls and puts at this level if we consider all option series:

Calls - Puts open interest SPY 20.04.22

25.04.22

In SPY, I see support at 420 and 400. If they don’t hold the 420 level, I will wait for prices closer to 400. From the 400 level, it is quite possible to try to buy.

24.04.22 SPY Calls - Puts open interest

Open interest in option series for the next month is as follows:

24.04.22 SPY open interest calls and puts in the next 30 days

Maximum volumes in puts at the 420 and 400 levels. The combined put and call chart for the next 30 days also shows the maximum volume at these same levels:

24.04.22 SPY combined open interest call and put

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