GAMMA GANG UPDATE

Jesus, VIX is still “not low enough”, based off current gamma reading .. As expected, with the closing of November expiration, a chunk of gamma did indeed come off the books but Friday was just strong enough where the change is hardly notable .. With gamma exposure up at a chunky $1.8b, there is a high probability that dips will remain heavily supported & the “magnet” likely draws SPX higher .. For any significant change in trend, they would likely need to chisel off some of the current gamma foundation over the course of days .. I should get new levels we could keep an eye on by tomorrow morning .. As we spoke about on the webinar, keep an eye on the sweeper activity as an indicator for intraday momentum.

FRIDAY’S NOTES & THE SUNDAY WEBINAR PRE-GAME

Besides it being yet another fun & profitable week, for the bulls anyway, we have a lot of things to discuss on Sunday’s webinar again .. Overall flow was at its best for the week on Friday & it showed in the price action .. Sweepers were active in other names who’s tickers aren’t AMD & ROKU, even though those 2 caught more flow again as well .. Commodities & related issues saw some additional bullish positioning, possibly preparing for a move higher into year end .. Remember just a few days ago I was getting a bit concerned that this exposure chase was just being focused on a select group of hot names, so yesterday was a good sign that buyers still have that appetite for value .. All week we’ve been seeing these mini short term rotations from day to day & we’ll discuss on Sunday what that means.. It’s been a clever technique that we have seen in past bull markets to hold the indices up & slam volatility .. Speaking of vol, our gamma friends have officially come out of all bearish VIX positions .. If you recall, on Sunday I had mentioned to you guys that the Gamma gang was playing SVXY to the long side for the week & tactically shorting VIX via puts .. In Sunday, I’ll show you what they’re looking at into next week .. We also learned this past week that our hedge fund friends have officially dipped their beak & have finally increased net long exposure .. Honestly, we already could see that in the action in those aforementioned hot chase names .. On Sunday’s webinar, we’ll go over what this means & what we need to do about it .. We’ll also review the other 2 key indicators for this rally & where they currently stand .. That would be the BAML BULL/BEAR POSITIONING INDICATOR & STOCK/BOND RATIO .. We end the week with the indices slamming highs into the closing bell & yet our Short-term sentiment readings have room for further upside .. We have yet to see these ST indicators get officially scorched & we have a bunch of afternoon fades & lulls mostly to thank for it.. As well as a lack of participation by several of the riff-raff favs .. There are a lot of retail traders attempting to short, call tops & pulling their hair out in this move higher. I saw something in the Steamroom this week that I never thought I’d ever see, AMZN was called a “turd” & attracting obscenities for its lack of participation .. That’s this current rally in a nutshell right there & why it has continued higher .. Lack of exposure in the right names & continued positioning in the wrong ones! Enjoy the weekend & I’ll see you guys Sunday 6pm est.

🔑 THURSDAY’S KEY TAKEAWAYS

More of the same out there Thursday .. Action dominated by November positions/protection being pushed out and replaced .. Momentum Sweepers focused on a select few hot names & basically stayed the course throughout the session .. AMD & ROKU were the 1-2 punch of the day as players were chasing for exposure .. The mini rotation I’ve been talking about all week was visible out there once again today .. Yesterday, biotech was the hot sector of choice & today they decided to sell most hot names in that group to look elsewhere .. This type of flow is not all that bullish as we’re not seeing much initial activity out there but being a quad witch week, we don’t want to get overly cautious.. The most constructive thing taking place out there again today was this aforementioned “mini rotation” gave the cyclicals yet another day to consolidate .. Some names & groups have held up a bit better than others but all in all, there has been a few days of much needed breather in banks, industrials, commodities, etc .. If the indices were doing the same, things would be lining up perfectly for a move into year end .. At least now we’re approaching the point where as long as we see the flow, all these rotation names are back in play again .. Even if the sweeper activity is not all that aggressive initially, we at least can go back to the point where we look to play some of these rotation names with time .. Regardless, things will become a lot clearer next week once we get through tomorrow’s expiration .. Price action should loosen up as well with gamma shedding some weight.. For tomorrow, let’s stay nimble & look to take advantage of intraday momentum off sweepers until further notice .. Hell, maybe they even decide to sneak in some weakness in the indices for us.

BIG PICTURE

OUR “BIG PICTURE” INDICATOR CURRENTLY SITS AT “POOR R/R” .. NEW POSITION ENTRIES UP HERE ARE NOT FAVORABLE WITH THE CURRENT RALLY NEEDING TO DIGEST SOME OF ITS RECENT GAINS .. WHILE WE CAN STILL HOLD EXISTING POSITIONS WITH TIME FROM ENTRIES AT LOWER LEVELS, WE WANT TO REMAIN TACTICAL ON ANY NEW OR ADDITIONAL RISK WE MAY CHOOSE TO PUT ON HERE.. FOCUS PRIMARILY ON INTIAL ACTIVITY IN FRESH NAMES, AT BETTER SPOTS, WHILE UTILIZING “REPEAT” SWEEPER ACTIVITY FOR MOMENTUM PURPOSES ONLY UNTIL WE GET SOME CONSOLIDATION OR A DRAWDOWN.