7/26 Recap

We got a big bounce in the Nasdaq today after what was one of the most vicious moves of the past decade outside of the covid crash. Someone sent me this note from Morgan Stanley last night

“The pace of selling has now reached historical levels across single-name equities, with the 2-week rolling net flow to single-names as of Jul 24th ending as the 3rd largest net selling event since 2016, trailing only March/Apr ’20 and March ’22. The acceleration in net selling has led to L/S net leverage falling below 50%, a 7.5% decline over the past 2-weeks (the 2-week decline is a 99th %-tile event relative to data since 2010).”

So you just endured one of the harshest moves in years and honestly if you just stuck to the simple 21 ema rule of not playing anything new below it and selling what you weren’t looking to hold long term when it broke, you would’ve been ok. As I said before that 1 simple rule is the thing I hope you take from me if you take nothing else because it will save you from a huge headache of being overallocated at the wrong time. Overall while today’s bounce is nice it is still fairly insignificant as all the short term moving averages are sloping down and we have to reclaim them for a recovery to begin. Next week is the super bowl with almost every big name ex NVDA reporting.

Recent Trades

I didn’t note this one yesterday because I really do not think much of these sub $10 stocks but this EVRI was in yesterday’s recap with 7.5 calls bought in size for August. It is up 42% today to $13 on a buyout. This was an insane trade, I cannot believe the SEC is going after Andrew Left today and this is ok buying calls in size 1 day before a buyout on an obscure name.

VLO - In wednesday’s recap I noted these VLO trades and yesterday it was up 5% which for a refiner is massive. It is now 156.63 after hitting the 200 day at 145 2 sessions ago.

Trends

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Today’s Unusual Options Flow

Here is today’s link to the database it will be up until monday at the open, I will have the rest of today’s trades added by this evening.