1/16/2022
Friday saw increased put hedging in $IM, $DKNG, $HYG (Which holds Consumer Cyclicals), SKR, SXRT $CHWY, $NAP, $PYPL, $AJRD, $CVNA, $ABNB, $DIS, $SQ, $COIN, $XLK, $TDOC, and $TJX. Of concern was put flow in high flyers was more spread out almost to hide the bets.
This upcoming week includes the FED blackout, Monthly Opex and a large roll off in Call Delta on 1/21. All events that are now being played up (see the flip flopping by banks on how many rate increases will happen this year). The Kabuki theater is getting a little ridiculous at this point making me not only fearful of taking longs but taking shorts as well unless they are complex and dated into March, possibly even April With that said. At any other time, this is the place to buy the market on any chart except for one thing.
Of note, Friday was the perfect day to drop the market below a long standing trend line going back to March of 2020. Yet it did not happen. This does not mean we are not due to see the 200 DMA. If anything a slide into the 200ma as profits are taken from ER reports seems likely with a roar of negative news to accompany to scare retail day traders away. In reality, individual stocks are still in play for ER Season and complex put strategies for the indexes by Thursday, while targeting individual stocks for a late spring buy if the market does not implode. Also note I am long into Thursday and looking for Squeeze plays into EOM unless something changes. But the one word of caution I would leave you with is for all the bluster, this market is not trading like it is at the end of a long term debt cycle. I lived in Vail during the 2008 meltdown. A year of relentless selling. You will know it when it happens. The threats turn to reality and a lot of money can be made on the way down.