Web’s Weekly Roundup & Limited Risk Reversals: Open Q&A November 7, 2015 Presenter: Web Begole

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Web’s Weekly Roundup Analysis of /ES (S&P 500 Futures) and forecast (NEUTRAL UNTIL DECEMBER THEN BEARISH) Analysis of /DX (Dollar Index Futures) and forecast (BULLISH) Open Q&A Session about Limited Risk Reversals

/ES Futures (S&P 500) YTD Opening Price: Current Price: High: Low: O/C Change: pts (+3.31%) H/L Range: pts Notable Pattern: October was an endless rally directly to the untested POC from September. Forecast: A broader view shows high resistance against making a new all-time-high this month, but if at all this year it will be this month. I expect however that November will be a return to the quiet non- volatile market we spent the early part of the year in with a potential for a significant downturn starting in December. The next untouched POC exists down at the 1620 level from November 2013.

/ES Futures (S&P 500) YTD Opening Price: Current Price: High: Low: O/C Change: pts (+3.31%) H/L Range: pts A Note on Untouched POC’s: Notice that the most substantial/surprising/quick moves in the /ES futures took us directly to untouched POCs from the past. October 2014 – Return to VPOCs from September’14 and June ’14 August 2015 – Return to VPOC from November ’14 October 2015 – Return to VPOC from September ’15 What remains are only the VPOCs far below us, price levels that haven’t been seen since 2013 or earlier. If the market decides to turn bearish, look for these price level targets: ~1617 ~1475 ~1380 Virgin POCs

Limited Risk Reversals How is a Virgin POC created? 6 Untouched! VPOC!

/DX Futures (USD Index) YTD Opening Price: Current Price: High: Low: O/C Change: pts (+7.6%) H/L Range: 9.235pts Notable Pattern: Hit three VPOCs on the way up to the March highs, returned back to the VPOC from Feb to the tick, and bounced. On Friday we took out the higher VPOC from May. Having fallen from the highs in March when FOMC rate-hike fears were first kicked down the road, we’ve recently seen a large rally as the October announcement put the hike back into play before the end of Forecast: Given this pattern, it seems to me that the /DX is looking to test the next VPOC above us >102 and if the rate-hike(s) happen faster than expected, 108 may be in order before the middle of If I’m looking for a reason for the /ES to begin its large descent, this is the chart I’m watching.

Looking Ahead Overall: It has been an interesting month of October for certain, but looking at the market in terms of VPOC action, it was almost inevitable (yet not necessarily at that speed). The market has now tested its highest VPOC and there are only targets below at this point. Given the strong NFP numbers from Friday, I think the entire market is now expecting a rate-hike in December and the FOMC has almost assured as much. Hence we see front running already beginning in the /DX. As the rate hike is still over a month away, I don’t expect too much excitement over the month of November there isn’t much to move the market, even OPEC’s meeting isn’t until December. So it is an opportunity to position one’s self. I expect to maintain a balanced long/short 50/50 book through the month and start leaning bearish 35/65 around early December.

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