WEDNESDAY’S KEY TAKEAWAYS

A few things to reiterate here as Wednesday’s session was basically a mirror image of what we been seeing all week.. If you didn’t think gamma was an important factor to follow in this game these days, you’re witnessing first hand of how it plays a powerful force on price action .. You could hit this market with a scud missile & she ain’t budging .. Every dip finds buyers & every rip towards SPX 3100 steps in glue .. And as we move closer to Friday’s Nov opex, unless they start pushing some stuff up & out early, we are basically stuck.. The more important factor to keep an eye on here is what may happen next week when a good chunk of this “glue” comes off the books & things likely loosen up quite a bit .. In the next couple days, we are going to get a better idea of how gamma lines up into next week & thru December opex but the things I’m eyeing here in the meantime is obviously flow & sentiment .. We’re not seeing much of any initial activity in fresh names, yet .. A few selective names are seeing buying but nothing aggressive enough that stands out .. What we are seeing is some interesting rotation under the hood though as the indices do nothing .. Not the major rotation that has carried this rally but smaller rotation from day to day .. A few of the hot pockets of major rotation (cyclicals) have started to breathe a bit & FXI/EEM the Asia related issues (which have led in recent months, in both directions) have cooled a decent amount this week.. I would suggest keeping an eye on both the flow & price action in FXI/EEM for clues of whether we push higher or need to digest recent gains .. We know sweepers have tattooed the likes of EEM FXI ASHR to ignite this rally, so they should show up once again off a decent dip, if/when its time .. There’s also a possibility we rotate back, out of cyclicals & into some of the crowded issues that have corrected a good amount for a bit.. That doesn’t mean that the “rotation” is over but it’s a clever way they can hold the indices up while they allow cyclicals, banks, industrials to consolidate a bit off some really strong moves.. Regardless, the next few days we should be getting decent info from the things we watch on a day to day basis .. So keep the eyes open & no need to rush to make any drastic moves without strong evidence at hand.. Let sweepers, sentiment & positioning do the talking, we just need to listen!

MONDAY’S TAKEAWAYS

Well, we got a little weakness this morning .. Sweepers didn’t waste much time to do some shopping into it either .. A brisk pace off the opening bell as buyers showed up in a variety of names .. The call activity was made up in large part of smaller short dated sweeps .. There was some size out there today but mostly showed up in select repeat names .. As far as initial activity, all the notable order flow there came in names that still are set to report earnings .. It sure looks like this week is going to come down to a battle between gamma & headlines out of Asia .. Without any major tape bomb, I’m hearing that gamma for Nov expiry is just way too large & powerful for much of any volatility out there .. SPX 3100 likely will still serve as a magnet, so if there is a little weakness created in the overnight session it could set up some decent day trade opps .. Similar to today’s session, Sweepers would be a solid signal as confirmation they are buying any such weakness .. It’s possible they could sneak in some weakness under the hood & allow select pockets digest recent gains .. We could also see a little rotation within sectors over the short-term which could set up a few quick trades .. As I shared with you guys last night, the gamma gang is looking for things to loosen up next week, once we get through this November expiration .. If we do get a little breather the rest of this week, it could set up a push higher next week.. Let’s get through the rest of the week & ssee where we stand at that point ..

FRIDAY TAKEAWAYS & WEBINAR PREGAME

I hate when I’m rooting for weakness for in the market.. There are a lot of folks out there who need weakness more than we do, that’s for sure, and that’s the major problem here .. Shorts & players with 0 exposure to anything risk-on related, just to name a pair .. Regardless, we want to be prudent here no matter how you look at the current situation .. As long as you have eyes & ears open, the likelihood is you had a solid few weeks recently & Sunday we’re going to discuss a few ways to go about hanging on to a chunk of it while still sticking to the game plan.. Stay bullish yet not foolish .. As for our bread & butter signals here, our whole plan has really been coming together nicely.. Especially this past week & I hope all of you guys/gals enjoyed it as much as I have.. Order flow has been impressive, I have a watchlist of names & ETFs I’m interested in that starts from here to Alaska .. Positioning remains favorable with HEDGEFUNDS still net short for Christ sake .. CTA & quants scrambling to get their exposure numbers up from basement levels .. And funds & institutions waiting with buckets of cash on the sidelines to do some shopping .. So things look good but we’ll discuss on Sunday’s webinar why we don’t want it to look too good, for too long of a stretch .. For now, get some rest, enjoy the weekend & Sunday at 6pm est we’ll talk some shop again my friends!