11/7 Recap

We got an explosive reaction out of DDOG after its print this morning which lifted all cloud names and took the Nasdaq up enormously. If you look at the options preview I posted over the weekend, every last trade on DDOG was bullish including some deep in the money put sales, so today’s 31% reaction, while shocking, really wasn’t out of the blue. As has been the case for a long time now, outside of tech, not much has done anything, the RSP, which is the equal weight S&P 500 is actually red today.

Meanwhile the SPY, because of its heavy tech weighting, continues on it’s biggest win streak in years. Still, we’re just back to mid October levels. The 8 ema is getting closer but it is about $6 off.

These are some really impressive moves we’re seeing in tech recently especially the small caps, but the large caps too with MSFT closing at all time highs on the weekly last week and the followthrough this week up another couple % in 2 days, so many of these megacaps are up 15-20% in no time and really seeing lots of outperformance. My stance has been to stick to the megacaps the last couple months as they are the only ones I really thought would do well in this high rate environment and that has worked very well.

Oil is down nearly 4% today, if you look back yesterday’s recap, there was a large buy of 50,000 XLE puts which is the energy ET, that is down almost 3% today, excellent timing. Oil looks to be in a downtrend now to the low 70’s.

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