Published with permission from the options flow and sweep specialists at Sanglucci.com.
With headlines reaching the stratosphere over the weekend, did you expect things to start slow today? The overnight session brought with it a strong gap down, a clear sign that markets rejected Trump’s immigration moves, and continued to sell into and through the open. Eventually the SPY would find its footing, but upside premium was largely destroyed in anything shorter than a month out in duration.
Smart money spent the day sitting back as they picked their opportunities amidst the premium destruction. But through all the red, there wasn’t an aggressive move towards puts. No, no, friends, instead sharks are waiting for some of the heavy hitters to report this week. And nobody wants to get caught on the wrong side of an earnings gap up. It’s ugly. So instead, they kept playing names they were already in love with. Yep, the Trump Trades.
Some early dip buying in DIS is a persistent trend in this market of late. The fact is the name is just so consistent when it comes to pumping out winning titles, and the Star Wars brand just crushes it on a whole different level. It’s basically paid for itself in 3 years….
AA saw a big buyer step up today as Trump continues to beat on the TradeWar drum. One shark scooped up over 10k of the April $40 calls for $1.15 a contract. Action is likely to remain hot here.
Consolidation. Relief. A break. Call it what you want but today, last night, was a result of selling pressure. Granted there was the added benefit of a nice gap down, but sharks are largely sitting on the sidelines, letting things play out as they wait for earnings to pass. Names that have been hot up to this point are likely going to stay hot as they’re viewed as safer shores during this time of extreme vol.
And at the end of the day, if you’re staying light and paying attention, very little has changed for you. Push and pull. Ebb and flow. Markets are built to give and take. And that’s what we’re seeing here. No concrete downside pressure, to this point, so nothing really has changed.
Sure the numbers are a little different, and we’re back in a lower channel if you really want to get technical, but as far as flow is concerned today is the same as Friday and the same as last Monday was.
So it’s still not the time to try and force that hero long. But if you’re looking to trade, things are definitely perking up.
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