12/8 Recap

We a stronger than expected jobs number this morning which the market did not like, it led to a big selloff which has no reversed to green. I don’t really put much stock into any of these numbers as they almost always end up revising them later. More importantly the economy seems to be stronger than most give it credit for as people keep getting jobs and that isn’t what the fed is looking for which is why yields ticked up today with the TNX up 3%. The recent rally has been on why the fed would be cutting soon and they won’t be cutting rates with such strong jobs prints.

The TNX is trying to break this long downtrend it has been mired in, if it does so, you can expect equities to begin to reverse. Today was odd with equities slightly green now with yields up so much, but it happens sometime. The TNX popping over the 8 ema is definitely a warning sign as it has been over a month since it closed above it.

The SPY remains in a right range but is moving up a bit with the 8 ema sloping up, as long as it isn’t sloping down, it is ok to remain long. It’s going to be an interesting close to the year with everyone up so much on megacaps that they likely won’t want to sell until early January but with yields possibly reversing higher we could see another move lower as you can see below the whole move the past month in the SPY was just inverse yields. It’s been a long time since we had 6 straight green weekly candles, I may have missed another one, but looking through the chart I think we last did this in 2019.

Oil may have bottomed yesterday, I hate saying that until we see a confirmation over the 8 day but oil reversed 2.5% higher today over 71 from 68.xx yesterday. We all saw the big put sales in oil I noted the last few sessions, we’re close to the bottom if I had to guess.

Recent Trades

LULU was one I highlighted on 11/30, it doesn’t really see options action ever and someone hit the max strike calls that day in September at 640. The stock is up almost 6% today on spectacular numbers and trading at just under $491 up over 11% in the following 8 days.

Another big one was in yesterday’s recap these NVDA calls expiring one day later were bought 3000x yesterday, that buyer turned $1m into nearly $3M in one session. That’s why I tell you to really pay attention to the short term expirations because when people are betting big money with a 1 day expiry, they better be right. I didn’t highlight it because that is just gambling noting calls 1 day later and that’s not really my objective but I still put it in there because it was a very odd bet.

Trends

1 Week

2 Week