— Thompson Reuters
— Thompson Reuters
Overall buying has been extremely selective & isolated out there in this climate, which makes it really difficult to trust anything outside of the the most aggressive buying .. Some names have started to see a little interest in recent days w/ under-the-hood software play $DDOG being a good example of that.. Late last week, Sweepers were chipping away at some July calls in the tech name. One to keep an eye on, especially if/when the overall flow & price action start to look constructive in equities again👇🏻
Bulls got another test Friday & had a shot at finally flipping momentum, at least over the short-term, but buyers wanted no piece of the selling into the weekend .. We can’t really blame them either, can we? The virus numbers are just starting to explode higher now that they’ve started to test people this week, New York + Cali have a major debacle on their hands & it just doesn’t feel like we’re at “peak bad news” with this thing yet .. The Global economy is going into a depression like freeze, tough to get a scenario much worse than that .. So that’s all the bad but we already knew the news was going to get worse .. There is some good that has started to build up this week, related to the market anyway & that’s what we need to pay attention to.. To start, it’s obvious at this point that the Fed is “all in”, and I mean “all in” .. They’ve primarily focused on rates & liquidity in the bond market so far but that’s where it was desperately needed most to avoid a complete blowup in credit .. More importantly, unlike 2007-08 or even late 2018 where the Fed was slow to move, this go around the bazooka was fired immediately .. Eventually this market is going to get a trillion dollar plus fiscal stimulus package as well, likely next week, on top of all the other bailouts & tricks Mnuchin has up his sleeve .. Can that cure a virus? No silly, but when this virus shit starts to flatten out, players are going to need to start looking ahead .. My guess is by that point, everybody & their momma has already just got done liquidating their long exposure.. And lastly, we have all out liquidation mode taking place everywhere out there, even more so in the bond market .. Sentiment is already at levels where markets start to work on intermediate bottoms .. HEDGEFUNDS are now out & on the verge of flipping net short .. Its the timing factor that we’re focused on now .& the 2 triggers being Sweeper activity & Sharp Hedgers .. We had some small signs this week that Sweepers were finally looking to put some real money to work into weakness, with buying in MCD being the poster child .. But into Friday’s reversal, buyers were nowhere to be found.. Same goes for Sharpies .. After a promising update last week, Sharp Hedgers decided to stand pat this week as opposed to get aggressive.. A bit disappointing but we still have a solid backdrop in sentiment.. These are all the clues we want to keep an eye on in coming days weeks .. Unfortunately the market doesn’t stop selling on a dime when you start to see these promising signs, the market attempts to wear you out, make you second guess your signals & feel wrong .. Shit, especially in a panic like this .. We’ll discuss all of this on Sunday’s webinar when futures open at 6PM est, as well as take some of your questions & thoughts .. We’ll also share some of the names we have on our watch lists that Sweepers have been poking around in .. Stay safe out there & HAGW!
Player opens August call spreads in Zoom as strength in the stock continues on Friday ..