2/16 Recap.

PPI came in red hot, on the heels of CPI being red hot. We had more fed speakers talking about higher rates for longer, I think the soft landing narrative is dead and equities are well ahead of themselves. The sharp reversal we are seeing now late day is likely more opex games than anything else but the fact remains, with higher rates, equities are dramatically overvalued. Of course for the moment that doesn’t matter as the technicals are bullish, but at some point they will, which is why I continue to sell puts lower and hold nothing long.

SPY

Closing back in the recent flag it was in and below the 8/10 ema is not bullish. Is today they day the market realized the data is awful? It very well could be. We have to see what tomorrow brings but the MACD is now firmly negative and it’s likely we go through a period of sideways or down now. I mentioned this yesterday when saying the TLT was breaking down and how that was ominous for equities.

IWM

This posted an inside day, not so horrible, just consolidation and it’s holding onto its 8/10 ema by a hair. Could small caps once again be the hiding spot going forward? It’s possible, the charts definitely show more strength than the overall market.

Dollar

The dollar remains firmly bullish and breaking out of a flag it’s in. This is what is weighing on equities. It’s very possible going forward we have a ton of chop action with the market doing alot of nothing. We did just breakout of a year long downtrend, consolidating is completely normal after this type of move and the stronger dollar won’t help anything.

Today’s Unusual Options Flow & What Stood Out