Published with permission from the options flow and sweep specialists at Sanglucci.com.
If you slept through the overnight session nobody would blame you after waking up and seeing how tight we were trading. But once again, the SPY would start the regular session with momentum in its back pocket as traders pressed indexes to, and through, all time highs. Action across the market largely continued yesterday’s bullish flow as smart money started to spread the love across multiple sectors.
The financials remain in a league of their own, with a few RUT names coming close, when it comes to investor sentiment ahead of the next six months. Flow has shown that there is an abundance of buyers with weeks, or perhaps just days or even hours, before Trump announces anything Financial Reform related. And then you had individual names, all of which were Trump Trade related, seeing bullish inflows as radically shifting macros create a more amicable environment for growth on the bottom line. And sharks know it.
Over the next couple of weeks, seeing flow in just one of the banks might as well count for the whole dang sector. Everything is going to be trading in lock step with each other. Individual fundamentals are largely unchanged, and nothing has changed in the actual market, but the promise of change has investors on the edge of their seats. And today is was BAC and DB that sent scanners into a tizzy.
There was a strong buyer in ACWI that slapped together a nice bet, as well as repeat action in GE. The cruise-lines saw CCL catch some attention on over 4.5x normal options volume today. The April $57.5 calls saw over 7,000 in volume.
DIS continues to pull investors towards the mother-ship with another strong June buyer over there. MAR saw an April call sweep send shorts running for cover.
In other words, Trump has this market jumping from every angle right now.
The backside of this market has VIX trading in the $10’s. Chew on that for a little bit….
There’s also the issue of crude remaining stuck in it’s channel at roughly $52. At some point the action is going to break, and fundamentals are still a major dragging factor on trading; we all just need to hope that it’s going to happen to the upside.
It’s a losing endeavor trying to fight the flow. It’ll always beat you. So any thoughts of a short are still ill advised at this point. Those, like the Author, waiting to see the Tax Plan draw some selling will have to continue to wait until Trump is good and ready to deal with that.
In the meantime, the straight line north will likely subside as the SPY opts to trade in a tighter channel, pinging back and forth from levels of importance without really making any substantial change. Which means you want to shorten up your leash and get ready to start picking tops and bottoms again.
This is trading, baby!
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