Action in Review | Big Red Bars | July 27th, 2017

by Seth Goonetilleke

Big Red Bars

July 27th, 2017

In a legitimate surprise to most everyone, the SPY actually managed to pullback…down -0.8%. Nothing too crazy but enough to get everyone’s attention.

Well, everyone but Wiseguys. There was little dip buying to be seen across the board today outside of typical ER positioning nonsense. To be sure, we saw enough to fill this article out with. But not much more.


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$Point it Out

As they are often wont to do, Wiseguys went absolutely nuts for BABA today.

In a strange reversal of fortunes, Alibaba dropped steeply off of fresh ATHs this morning and ended up closing the day at $154.15. The name saw some averaging down action later in the day, but time will tell if those initial buyers will get back to even. Regardless, the action was quite sharp.

HOG saw fierce activity in some very near dated calls yesterday, and that action continued today. As an answer to that activity, rumors started to hit stating that Harley Davidson was in the midst of ironing out some kind of deal with Tesla.

Someone always knows something, huh?


DRI, Darden Restaurants, saw a shark create the largest position of open interest today via a quarter million block bet into some August OTM calls. This was some of the most solid buying into weakness that we saw today.

On a more typical note, Wiseguys continued to purchase size and variety in C. Sweeps, blocks, near dated, long dated, but all of them for calls. Sharp money seems exceedingly bullish on C, much more so than just the banks in particular. It’s recent strength completely justifies its dominance in the flow as it continues to outperform.



$Wrap Up$

As we guessed at yesterday, TLT opened far away from yesterday’s $124 close.

In a win for bond bears, $123 was revisited and ultimately broken, though bulls were able to scrap together a solid defense. The 20 Year ended the day at $123.13 for a very exciting session.

Precious metals and miners suffered very similarly, and also bounced off of the lows in likewise fashion once the markets decided to let go a bit. Sweepers played GLD both ways as gold’s fate remains uncertain.

Volatility finally found itself ready and able to burst over a $10 VIX, hitting as high as $11.50 before the indexes started to piece themselves back together. Let’s see if this strength can be maintained, as there’s nothing Wiseguys love more than buying into weakness.


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