No big changes in sentiment from Monday’s session .. The only thing of note was the equity put/call ratios elevating a bit into yesterday’s close as players put on some final hedges into the Fed .. We saw it play out in flow as well as action was fairly one-sided for most of the session, then finally protection started to surface late afternoon into the closing bell.. Overall flow looked a lot better yesterday as a whole in comparison to late last week. It was the same type of activity, it just seemed like there was a lot more of it, especially throughout the 1st half of Monday’s trading. There’s some bullish headlines out of the Europe overnight with more stimulus back in discussion there.. German DAX looking healthy to this point.. Tomorrow is the big day, Happy FOMC Day Eve to all of you btw. We’ve been accustomed to seeing markets drift higher into these type of Fed meetings, so we can try to stay nimble & take advantage of that if the green continues into tomorrow. Good luck out there today!


BABA has actually seen solid bullish positioning in size recently with most orders coming in strikes dated after the summer.. Besides some time behind recent bull bets, there’s also been some cheaper put activity in short-dated strikes, likely protecting shorter-term headline risk.


I was hoping we would have some sort of lean, in either direction, out of flow or sentiment heading into a big week. As we get ready for a much anticipated Fed meeting, we currently have no edge to make a play off of here. We’re obviously going to discuss the topic more in depth & at length during the Sunday webinar (which starts at 6pm est & will be recorded) .. but I just felt like running a few things by you guys/gals beforehand, just in case you might have some questions or comments to share tomorrow evening..

SWEEPERS Lets start off with the flow .. It has been sloppy at times as there’s been a higher amount of block-trading, which as we know usually is an indication of a higher degree of hedging & stock replacement taking place out there. My interpretation of this type of activity is simply players looking to take down principle risk while yet remaining bullish.. We often times will see this when there is a concern about an increase of headline or event risk in markets. Sweeper activity as a whole has been bullish but extremely selective at times & most players are focusing on extreme short-term timeframes while sizing down . There has been a lot of smaller bets in mostly hot momentum type names.. On the put-side, there hasn’t been much of anything standing out in the order flow that shows us there is aggressive bearish positioning taking place, that too has been mostly smaller short dated bets or protection.. As a whole flow has a bullish lean but bulls have been a lot more conservative & less committed than we would like to see.

SENTIMENT While most intermediate-term indicators remain in decent shape & a few just coming out of favorable territory, there’s nothing favorable to take away from any of our short-term signals. At the same time though similar to flow, as a whole there are no real caution signals flashing either. We have a few isolated readings that are interesting but for every bearish signal there is a bullish one.

So what’s this all mean then? Well, for my explanation I’m gonna take you back to the title of this post, there is just “no edge” out there currently. Always keep in mind, both sweepers & sentiment undoubtedly are at their best at extremes.. When the riff-raff is all on one side of the boat or when sweepers are aggressively sweeping the board, that’s where the money is! Be sure to bring any questions, comments or insight to Sunday’s webinar ..