10/16 Recap

The SPY is pulling into that 8 ema, yesterday it did put in a bearish engulfing candle which typically leads to a short term reversal, but that hasn’t exactly happened yet. Worst case we’re looking at now is a move down to the 21 down at 572.33. We saw those big TLT trades I highlighted yesterday expiring in 2 weeks, those tend to be bearish market trades, for now things are ok, breadth has been good and all the weakness has been contained to mostly megacap tech with Microsoft breaking down below the 200 day again and META going from a leader to a laggard nearly touching the 21 day today. Earnings kick into swing this week with Netflix and the weakness over the last month or so in big tech is telling, let’s see what the period ahead holds for them.

The real worry for equities is this DXY chart below and how it keeps going up, this is not what stock bulls want to see. If this can get over the 200 day above, the dollar has alot of room to run and that would pressure the market. You want to see the dollar reverse somewhere around here if you want equities to push higher.

Recent Trades

UAL - In the 9/12 recap here I noted these United Airlines calls bought for October expiry, there’s 2 days to go till that now, these calls are up over 30x after United made an incredible move today flying over 11.5% to $71.40 right now. They’ve had alot of announcements since with good numbers and the starlink deal, not often an airline stock goes up 40% in a month on commons but look below at all the heavy call buying in early September, this was a very telegraphed move. If you caught it, well done.

Today’s Unusual Options Activity

Here is today’s link to the database as always it will expire at the open tomorrow and the rest of today’s trades and trends will be updated by this afternoon.