Published with permission from the options flow and sweep specialists at Sanglucci.com.
Another long weekend in the books and equity markets were full of pent up energy today. Overnight markets drove futures lower but premarket trading gave the SPY a minor boost as traders listened for the opening bell. With the day’s first official prints, the SPY caught a lofty bid and worked its way back toward unchanged, but momentum would stall and sideways action persisted.
Smart money came to market today but ultimately played a bait and switch on retail traders. They were targeting ETF puts throughout the session, especially as the SPY clung to the day’s highs and call premium was juiciest. But ultimately, today was mostly quiet.
Outside of the matrix, headlines continue to build as Trump is just 2 days away from the Oval Office. And evidently nobody can take his phone away from him, because he was tweeting again today. We’ve seen him go after leaders, companies, and movements.
Today he went after fiat currency. The dollar.
It feels like a bit of a cheap move, taking on something that can’t actually speak for itself. But Trump’s tweet about the dollar being too strong would end up shaking markets and driving sharks towards some interesting water today.
Smart money was on the scene Friday with the TLT action, and again today TLT sent scanners into a tizzy. Sharks were all over the March calls there. GLD longs had a field day with the hyperinflation woes. Price fixing and what not. Things are really heating up if you’re looking for the global economy to have a coronary early this year.
And there was even some bearish flow coming into the SPY, IWM, and QQQ. In other words, it smells like it’s time for a fade.
The backside of the market continues to keep crude above $50 as OPEC news has taken a back seat to all this Trump stuff. But seller beware; crude looks primed to rip faces in 2017.
Back and forth, back and forth. That’s what we’ve been dealing with for the last couple of weeks. But there is hope. As Trump takes office and starts shredding regulation, a tidal wave of action is going to drop in on the markets. Portfolios will need rebalancing. Positions will be gutted. And above all else, volume of the most epic proportions will ensue.
And we’re almost there. But if you blow out your account before we get to the fun stuff, what are you going to do?
Do yourself a favor, slow it down until next week. You’re not going to miss anything important. And you will likely keep yourself from buying highs, because smart money continues to leg out of positions with the SPY holding close to all time highs.
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