10/10 Recap. We Hit New Lows.

Before I get into today’s recap, I want to highlight DEN today and a trade I noted in last monday’s recap that stood out and why the most important part of these daily recaps are the table of unusual options action I post.

When I noted it, I mentioned it was a name rumors had been swirling around for some time. Today it popped to $104 up almost 20% from last monday on a rumor that Exxon was interested in acquiring it. Once again highlighting the importance of monitoring the options market for unusual activity. I don’t know how many I’ve brought to your attention in the last few months but the options market continues to be the greatest barometer of market direction there is.

As for today, we hit new lows on the QQQ, the SPY did not. Tech continues to be dead, but the charts have told us that for some time. The dollar perked up over 113 again which contributed to the pressure on equities. Jamie Dimon spoke this morning and said he expects equities to go down another 20%. When the CEO of the most important bank in America says that, you have to take note. Interestingly that 20% downside he noted comes into what I’ve said is my worst case of 2800 on the SPX.

The SPY as you can see is still below all moving averages, but it tested below the 2020 highs today(the red line) and it closed over it. We keep toying with that line, the longer we do, the higher the odds are we break through to the downside. Still though, we did not break to new lows today.

The QQQ though broke to new lows and CLOSED at new lows of the year. Tech is not bullish whatsoever. This is telling you to avoid tech for the time being. I even was short some put spreads, not for big money, but even those I closed today. New lows are always a do not touch. I will discuss those below when I go over my trades.

The dollar is up 4 days in a row and looking to re-test those yearly highs at 114.77. The dollar continues to be your biggest headwind if you are long equities not named Twitter.

Today’s Unusual Options Activity & What Stood Out