Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
Markets have been in a wicked consolidation pattern with a bias to the upside. This move is tenuous at best. The price action is not a bullish as it has been, but the trend is the trend. Traders learn not to fight the tape or the trend no matter how bad it looks.
It appears that the FED is starting to panic as the markets get away from them. On Friday morning the FED stopped the (SLR) supplementary leverage ratio for banks. The lending policies have been the main source of the rally which is looking more and more like a bubble.
Amazingly the options strategies leaders are bullish or at least appear that way. One thing we always want to remember is things may not be as they appear. With the number one strategy being call buying those who are short could be covering up their short positions creating a synthetic put. There has been a little more bearish activity with some put buying, however the VIX is dropping.
As you can see, the markets are confused as well as the traders. The only thing that remains constant is the options strategies being used. The bullish symbols have changed again with GME on top, followed by AAPL. SPY, PLTR and BA. Bearish leaders are FXI, VXX, DASH, AMD and CVX.
To sum everything up, markets are on edge and can move either way. Confusion is everywhere which is the pure definition of consolidation and uncertainty. Eventually there will be a big move and we will be ready.
Todd “Bubba” Horwitz
BubbaTrading.com