Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
For the first week in many markets were lower last under some heavy selling pressure. Warnings are starting come more frequently and markets look and feel tired. However, we are not calling a top only given our observation and our algorithms are still long.
Although there appears to be weakness here and plenty of warning signs the option continues to buy calls. Call buying has been on top of the leaderboard for months. Making a big move up the board is bear calls, followed by bull put spreads and bull call spreads.
Last week we saw another round of crazy trade in GME. The stock spiking almost 120 points in the aftermarket, IV was close to 800% during this action. No one knows where the mess will end but there will be many hurt in the path.
The top of the bullish list of symbols has changed slightly, tech is not dominating this week which makes sense considering the pressure the Nasdaq was under last week. SQ moved into the top slot, followed by BA, SPY and AAPL.
The top bear symbols are not obvious, except for the QQQ’s, it was XLF, PAAS and JPM. This week will go a long way in telling us what is next. We will be watching the price action for clues and will react when we see a favorable set up.
Patience and discipline are always the best strategies.
Todd “Bubba” Horwitz
BubbaTrading.com