10/5 Recap

This mornings jobs number sent stocks reeling. What’s new? Up or down everyday on whatever new datapoint they want to panic over. The VIX is nearing 20 so you’re seeing more violent swings in the market, remember, the higher the VIX goes the bigger intraday moves you will see. Oil got crushed again and is sitting below $83 as I type this. If this holds up through Q4, alot of companies are going to see much better margins than feared.

The SPY continues to toy with the 200 day but hasn’t actually touched it yet.

I think the big problem stocks are having now is it is impossible to know what “cheap” is. The whole investment complex is based off the 10 year and I don’t think there is a soul in the world that can tell you where the 10 year will be in 12 months, hell probably not even in 12 weeks. The reality is the fed has caused so much confusion by being so inept and continuing to buy MBS in 2021 that they have been so wrong on every timeline they’ve given. Whether it be inflation is transitory to dot plots showing 1% rates by now, whatever it is, they simply cannot be counted on for anything at this point and people are having a difficult time knowing what multiple to pay when we have no idea if rates are staying flat, going up or going lower. If rates were going lower sometime soon, stocks are cheap. If they’re not, most names aren’t. The most important thing to know about markets is they have uncertainty and we have way too much of it right now in ours.

On the plus side who needs fundamentals when you have access to all the dirty action going on in the market daily with the options data I share everyday. Yesterday we had a couple impressive moves amongst them:

1. Who saw those RIVN puts expiring Friday at $22 that I noted 3800 of? Those are up a nice 30x today. They closed yesterday at .09! That’s why I always tell you to pay extra attention to the weeklies, whoever bought those turned $35k into $1m+ in 1 session. Not a bad “guess” on their part, after-hours Rivian did an offering and the stock got crushed down 20% today. This right here is why the recaps go out mid day, for the people who want to play this stuff intraday.

   

2. LW is up 11% over $100/share as I type this up. I had a couple people email me yesterday saying it was funny how I joked about it being a French fry company, well guess what french fry company sales were +48% and Income was +106% on their call yesterday and I specifically highlighted that one when I said hey people this obscure food name saw calls 3 days in a row that is ummm a little weird…..

   

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Today’s Unusual Options Activity