pre mkt thoughts

- on european open there was some positive headlines out about trade normalisation between US and China, yet that did not do anything for SPX. funnily, it fell! - this to me marked a tone shift in market structure over the last 6 weeks.
- we had huge cta covering to start this rally in April, - then CTAs had about 50B to buy if mkts rebounded up. Not saying mkts will go down 5%, but the equivalent sell pressure now looks to be about 180B if we do hit air pockets below.
vol thoughts
-atm spx vol is cheap. put skew is also VERY cheap. this makes the cost of hedging really low.
- SMH vol imo for the put skew is also underpriced. Alot of the components for SMH are trading at their highs with their respective support levels almost 40% below...... it seems likely to me that if we have a 5% day in SMH, it could very well kick start a move down to -10 or even -15% down day. (yes. 1 single session)
rmb - markets are not rational, they can get overly optimistic...and also overly bearish. im not here to prognosticate. just to trade.
good luck!