Market Report: New Highs, No Fear
By Todd Horwitz on Apr 18, 2021 at 9:10:09 AM ∙ Comments

 Market Report: New Highs, No Fear

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Todd Horwitz Chief Strategist BubbaTrading.com

Be Prepared not Surprised.

Markets continue to make new highs almost daily. We have not seen a hard sell off in weeks. Last week the Nasdaq joined the Dow and S+P with all time new highs. The Russell is at the same decision point the Nasdaq was two weeks ago, will it breakout or breakdown?

The overwhelming complacency in markets today should be setting off an alarm in investor’s minds. With the big drop in the VIX now hovering around 16 tells us its really trading around 8. Traders and investors are convinced these markets are never going down again. History tells us that this rally must stop at some point, nobody knows when.

The trend is up meaning markets will go up until they don’t. However, we must have concerns that this could end at any time. Options suggest that the rally has legs which makes sense since money goes where it’s treated best. Equities are still the boss of yield and returns add in cheap money which should extend the rally.

Long Calls remain on the top of the list for the 20th week in a row. Bull Put spreads follow closely and the VIX killer Put selling is moving up the list. When looking at options strategies remember that we never know what is on the other side of the trade. Long calls could be covering short stock but when you add in Put selling its all bullish.

Once again Tech is starting to dominate the bull market with QQQ, TSLA, AAPL, NVDA and SQ leading the way. Other than the SPY the top 10 are all tech. On the bearish side we find XLU, VIX, SNDL, PLBY and EWZ.

With the start of earnings season, anything goes. Last week saw the banks beat expectations handily.

Todd “Bubba” Horwitz

BubbaTrading.com



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