Mohicans markets：Concentrated Short Bets Focus on Key Supports

Mohicans Markets ETA is the education and training center of MHM Chinese service area. Based on the global financial derivatives market, it aims to create an exclusive learning platform for industry practitioners and investors.

Reminder: This article involves the technical analysis of 6 varieties of spot gold, spot silver, U.S. crude oil, EURUSD, GBPUSD, AUDUSD. Starting from the distribution of market chips, the change data of options positions published on the CME official website is superimposed on the average order flow change data of large brokers in the industry to more accurately mark the market trading sentiment in important price ranges.

The order flow mainly refers to the following Oder Book data, which is updated every 20 minutes, taking XAUUSD international gold as an example:

The opinions and strategies provided in this article are for reference only and the data are all from large brokers. Please check them according to your needs. They are not investment suggestions. Please read the statement terms at the end of the article carefully.

Key Data

Fundamentals Overview

On Monday, September 20, investors maintained a cautious stance ahead of this week's Fed policy meeting. The market generally expects at least a 75 basis point rate hike, with a 20% probability of a 100 basis point rate hike. The strong resistance of the 1680 mark also limits the rebound space of gold prices, the US dollar index is still at a relatively high level, and SPDR positions continue to decline. The World Bank and IMF warned of the risk of a global economic recession, suppressing the outlook for crude oil demand, and oil prices fell sharply overnight. Although the current moderate rebound is adjusted, the Asian and European stock markets generally followed the overnight decline in US stocks on Friday, and US stock index futures also extended their decline, which may further drag down oil prices. In addition, the prospect of aggressive interest rate hikes by the Federal Reserve and the U.S. Department of Energy's statement that it is unlikely to seek to replenish the strategic oil reserves before fiscal year 2023 have also dented bulls' morale, and investors need to beware of the risk of further declines in oil prices.

The Mohicans Markets strategy is for reference only and not as investment advice. Please read the terms of the statement at the end of the article carefully. The following strategy was updated at 15:30 on September 19, 2022, Beijing time.

Technical Point of View

CME Group options layout changes:

1720 Bullish increase, bearish decrease slightly, bulls target

1695-1700 Bullish increase, bearish increase, strong resistance

1675-1680 Bullish increase, bearish decrease sharply but the stock is large, key resistance

1670 Bullish increase, bearish increase, first support

1660 Bullish increase, bearish increase and large volume, short-term short-term short-term target and intraday support

1650 Bullish increase, bearish decrease, bears first target

1625 Bullish unchanged, bearish overweight reduced, support level

Order flow key point labeling (spot price):

1708-1710 Strong resistance (during 1700 there is a certain resistance)

1692-1693 Bears defensive position, breaking stabilization will weaken bears confidence

1680 Short-term competition for key positions

1671 First support level, below which there will be renewed downward pressure

1654-1757 Critical support,

Breaking down the alarm triggers a new round of downtrend

1643 Short target

Technical Analysis

From the perspective of options market sentiment, 1680 and 1625, which were relatively concentrated in the early put options, both experienced short positions and left the market, suggesting that the willingness of capital bets to further break down has weakened. However, the willingness of bulls to increase their positions is also average, suggesting that in the absence of important economic data, the probability of continuation of the volatile pattern is expected to be high before the Fed meeting.

Above the current price, the 1677-1682 call options have increased by more than 200 lots, bringing a certain buffer to the short-term downside. The first support below is 1672, and the short-term short-term target is concentrated at 1662, which is also the key support for the day. If the price of gold rises above 1680, short-term bearish confidence will be weakened, and the strong resistance above will be seen at 1697-1702.

Note: The above strategy was updated at 15:00 on September 20. This strategy is a day strategy, please pay attention to the release time of the strategy.

Changes in CME Group's options layout (futures prices in December):

20 Bullish decrease, bearish unchanged, first target for bulls

19.50 Bullish increase, bearish increase, short-term long and short fight for key position

19.25 Bullish decrease, bearish increase, key intraday support

19 Bullish decrease, bearish increase, strong support

18.50-18.55 Bullish unchanged, bearish reduced, bearish target

Order flow key point labeling (spot price): 

19.89 CPI data shows the ups and downs, strong resistance

19.67 Secondary resistance

19.56 Short-term resistance

19.2-19.3 Intra-day long and short demarcation, at this level, pay attention to the risk of continued downside

18.8-18.98 Support zone

18.3-18.5 Key support zone (bulls cost zone)

17.85-18 Ultimate support

Technical Analysis

The overall performance is better than that of gold, but it is still subject to the suppression of the daily trend line, which also corresponds to the upper and middle of the daily Bollinger Band. There was little change in options as a whole yesterday. 19.5 became the first key position for short-term capital competition. Below this, it may test the key support within 19.25 days, which is also the key level of order flow. If silver falls below 19.2, it will increase the risk of continued downside. The first support below is the 19 mark, and 18.3-18.5 is a short-term short target, and it is also a long-term cost area that has rebounded in the past week.

Note: The above strategy was updated at 15:00 on September 20. This strategy is a day strategy, please pay attention to the release time of the strategy.

CME Group options layout changes:

90 Bullish increase, bearish increase slightly, bulls target

87 Bullish increase, bearish decrease, bulls and bears fight for points

86 Bullish decrease, bearish decrease slightly, first resistance

85 Bullish increase, bearish increase sharply, downtrend energy expands

82.5-83 Bullish slightly increase, bearish increased, bearish target

80 Bullish slightly increase, bearish decreased sharply, downside momentum weakened

The key points of the order flow are marked: 

89 Strong Resistance

88 Resistance

86-86.4 First resistance

85.4 Short-term long-short competition (only for short-term)

84 The first support during the day, the broken position continues to look down near 82

81.7-82.13 Key support range

80-81 Early bearish target, break down and look around 78

Technical Analysis

Before the interest rate decision on Thursday, the market sentiment was still relatively cautious. Yesterday, the oil price was still fluctuating in a wide range. There is no obvious bet in the options market, both long and short positions near the current price enter the market, and there are short positions at far-end points to leave the market. 84.6 can be regarded as the dividing point between bulls and bears, but there are many bears entering the market, and the downward movement can expand. The 85.6 short stock above is large, which still puts pressure on oil prices. The bulls and the bears are competing near 87, and the bulls have entered the market one after another. After the successful breakthrough of 86.6, the bullish sentiment is expected to recover further. If crude oil falls below 84.6, it will see 82.1-82.6. 79.6 is the short target in the early stage, but there are many put options to leave the market, and the downward momentum will weaken.

Note: The above strategy was updated at 15:00 on September 20. This strategy is a day strategy, please pay attention to the release time of the strategy.

CME Group options layout changes：

1.02 Bullish increase, bearish unchanged but the stock is large, long target

1.0150 Bullish unchanged, bearish with large stocks, resistance

1.0125 Bullish increase, bearish unchanged, long target

1.0050-1.0075 Bullish increase slightly, bearish increase slightly, resistance area

0.9975 Bullish unchanged, bearish increase sharply, breakout alert for expansion of downward momentum

0.99 Bullish increase slightly, bearish increase slightly, support

0.98 Bullish unchanged, bearish decrease, weaken downward momentum

Technical Analysis

The EURUSD support has moved up from 0.9950 to 0.9970 at the Asian open so far Monday morning, but remains blocked by the key 1.0050 positive force level hinted at in yesterdays report. From the latest options changes, 620 lots were added at 0.9975. If it breaks down again, it could face a new round of short-term downward pressure to test the lower edge of the 0.9950 range. However, 0.98 continues to have put options leaving the market, indicating that the willingness of short positions to break further down in the short term continues to decrease. On the other hand, the first resistance area remains at 1.0050-1.0075, a break would take us to 1.0125, where and 1.02 are the levels on which calls are heavily bet.

Note: The above strategy was updated at 15:00 on September 20. This strategy is a day strategy, please pay attention to the release time of the strategy.

CME Group options layout changes：

1.16 Bullish unchanged, bearish increase, resistance

1.1550-1.1570 Bullish increase sharply, bearish increase, resistance area, long target

1.14 Bullish unchanged, bearish increase, break down and be alert for short term downward momentum

Technical Analysis

The GBPUSD rebounded after testing 1.1350 support during the Asian session so far in the morning on Monday. However, it was once again blocked by the key resistance at 1.1450 hinted in yesterday's report, and overall remains in a range oscillation of 1.1350-1.1450.

From the options changes, the new betting points for GBPUSD long and short are mainly concentrated at 1.1550-1.1570. If we can break through this resistance area, we expect to gain upside momentum, but 1.16 resistance is still in effect.

Below the short term focus on the defense of 1.14, below this level intraday perhaps the possibility of retesting the bottom of 1.1350.

Note: The above strategy was updated at 15:00 on September 20. This strategy is a day strategy, please pay attention to the release time of the strategy.

CME Group options layout changes：

0.69 Bullish increase sharply, bearish unchanged but the stock is large, long target

0.685 Bullish increase, bearish decrease, long and short contention points

0.58 Bullish decrease, bearish decrease, resistance weaken

0.67 Bullish increase, bearish unchanged, breakout alert for risk of downward momentum

0.655 Bullish unchanged, bearish increase slightly, short target

Technical Analysis

GBPUSD continues to maintain oscillation, and from the options changes, there is no significant short action, and longs continue to bet on the upside at the previous high of 0.69, but there is a large number of long departures at 0.7. In the short term the market remains bullish, but the departure of long positions at the far end suggests that the upside momentum in AUDUSD may be limited.

Above 0.68 resistance weakened, upside may test 0.685, long target at 0.69. There is some support around 0.667 during the day, shorts still have a stock advantage. Breakout alert for expansion of downward momentum risk, below support is weaker and short target is at 0.655.

Note: The above strategy was updated at 15:00 on September 20. This strategy is a day strategy, please pay attention to the release time of the strategy.

Statement | Disclaimer

Disclaimer: The information contained in this material is for general advice only. It does not take into account your investment goals, financial situation or special needs. We have made every effort to ensure the accuracy of the information as of the date of publication. MHMarkets makes no warranties or representations about this material. The examples in this material are for illustration only. To the extent permitted by law, MHMarkets and its employees shall not be liable for any loss or damage arising in any way, including negligence, from any information provided or omitted from this material. The features of MHMarkets products, including applicable fees and charges, are outlined in the product disclosure statements available on the MHMarkets website. Derivatives can be risky and losses can exceed your initial payment. MHMarkets recommends that you seek independent advice.

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