11/15 Recap

Nasty session, is it OPEX? Is it the bad economic data we got this morning? I don’t know and it really doesn’t matter, what matters is we’re losing the 21 ema on the SPY right now. We were just below that till the election, Trump won, we took off and now the Euphoria is wearing off. We still have that election night gap open at 576.7. As for now, you know my rule, anytime we close below the 21 ema, all short term trades have to come off otherwise you’re asking for pain if we continue lower. The market is sending you the warning signals now, its best to listen on day 1. Again, no need to remove longer term holdings just sell covered calls vs them and understand you can’t just create taxable events in small periods of weakness on longer holds. This would be our 4th or 5th time doing this 21 ema break in 2024, I’d have to look, with the most recent one being by far the shortest at 4 sessions right before the election. Still, moves below tend to lead to prolonged periods of weakness, so we have to respect it. We still haven’t closed below there, 585.59 is the level today, we are just testing below it right now.

The big laggard is the QQQ look at the clear break of the 21 ema below. All the megacaps are weak today except Tesla, that has been a darling since the election. The 50 day at 490 is the next spot it needs to hold or bigger issues are ahead. The IWM ran into the 21 ema today but it hasn’t broken it yet. Odd to see large cap tech be the main source of weakness after such strong reports, but here we are.

Recent Trades

BE - up 48% right now after being halted yesterday, I highlighted this one back here in late August here at the time they bought 12/15 call spreads expiring TODAY, imagine the “luck” here if you followed the risk reversal I drew up below you turned a .15 debit into $3 today. That one went down to the wire but that’s why you have to sometimes stick it out to the end.

Looking at the database there were a couple more trades this month too with a massive block of 10,000 calls bought at 17 for January expiry at 10:08 am in the recap 2 days ago, impeccable timing.

Today’s Unusual Options Activity

Here is today’s link to the database, it will be open until the opening bell monday morning. The rest of today’s trades will be added by this evening. Check back for the updated trades and trends.