Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
The winds and trend have changed, the bears are in total control. The reversal is in place as global worries take center stage. The things that troubling markets are high inflation, supply chain issues and the uncertainty surrounding the FED.
Adding fuel to a fire burning is the administration pushing a false narrative on Russia and Ukraine. The probability of an invasion is almost nil, yet they continue to push it. Russia has no advantage by an invasion and in my opinion, they are laughing at the noise that comes out of Washington.
This week should be interesting, a shortened holiday week with an extra day for investors to be scared. The final score is not in place yet, but this could be the start of a much bigger correction, bear market leading to much bigger losses than anyone realizes.
No surprise that Call buying leads the way but if I were to bet what they are doing with those calls they would be creating synthetic puts, short stock, long calls. Put buyers, call sellers and call spread sellers are the dominant trades. The bulls are buying the QQQ, UVXY (bearish), AMD, GLD and MARA. The bears are focusing on SPY, AMZN, OSTK, CWH and ROKU
The Bulls were buying AAPL, GLD, CLF, MSFT and CWH which is a mixed bag. The bears are buying VXX, selling QQQ, IWM, CHWY and LCID. The upcoming week could be wild, we urge you to be careful. Understand that bear markets bring the most vicious rallies. Look to sell the rally.
As traders and investors, we have one thing to remember, follow the trend of the market. Be patient disciplined and leave your emotions out. The most important thing to remember is money management and self-control.
Todd “Bubba” Horwitz