Tuesday and Wednesday options activity reveals what is apparent from looking at Twitter, which is that the reopening bulls are back, and they brought along the meme stock bettors who have been piling into AMC options like last May/June.
AMC traded more options than any other stock yesterday, easily more than AAPL, and with 3-1 call to put ratio. The meme stocks have driven down the put/call ratios for the overall market to June levels. From looking at my watch list, most of the speculative retail plays are rallying strongly over the past week.
I am still hearing a lot of analysts calling for a pullback because its gone up too far, but less than back in June and July. A couple of days ago on CNBC Fast Money, permabear Guy Adami basically threw in the towel, saying that the dip last week leading to new all time highs means market is probably going higher.
I have been too bearish on the market, I expected the highs from earlier in the month right before last week's dip to be resistance but the market keeps making new all time highs. At this point, I have little conviction on any market calls looking for a pullback, but a lot of conviction when it comes to buying those dips that don't last for long. I have a feeling that things will change in September, with weak seasonality and each FOMC meeting a potential negative catalyst with taper announcement fears.
But this market doesn't want to stay down, so you can't hesitate when those occasional selloffs come. You have to rush in like a conditioned animal ready to buy the SPX on any 2-3% dips. No questions asked. You will not get a 5%+ dip unless there is a black swan. And it doesn't pay to look for black swans.
Boring bull market continues. Not expecting anything meaningful out of Jackson Hole. Powell is almost at the reappointment finish line, he will not be looking to rock the boat before Biden's decision. Expect either status quo mumbo jumbo or a dovish lean.
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