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Degens are playing with VIX and 3x Inverse ETFs again...

July 18th, 2021
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Market Update for the Week Ahead: 07/18/2021

Good Morning


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What's Happening Heading into Monday? 

S&P 500:  Pretty strong sell candle on Friday...but large support is right below at $422.

Live Charts

 

Volatility 1: VIX options were pretty bullish into the weekend...this is notable and should be monitored on Monday for follow through this week. 

Matrix Modes

 

Volatility 2: VIX options trades sorted by largest premiums...all calls in the largest order flow. 

TradeTape

 

Volatility 3: VIX call options showing up in the most Unusual Options Acticity on for the major exchanges on Friday (6 different contracts were substantive)

Discovery Scans

 

Volatility 4: VIX options as viewed by the most Unusual Activity for calls...(called the VIXinator). Looks like the $19 Jan 19, 2021 was getting a lot of attention. 

Discovery Scans

 

TLT (Bonds):  Bonds still with a bullish bias being above all the moving averages and the bull bear pivot. 

Live Charts

 

What about the Options Market last week?

Last 7 Days when we are looking at Total Volume? SPY completely dominated the volume last week by a wide margin. 

Race Bars

 

Last 7 Days when we are looking at Total Premium? All FAANGs and major indexes driving all the major premium. The only meme stock up here in this size is AMC. Meme stocks not getting the attention right now. 

Race Bars

 

How the Options Market finished the week last week? Mixed action so lets dig deeper below...

Matrix Modes

 

The top 50 volume traded Stock Options at the close on Friday? Pretty bullish still at the close...

TradeScape

 

The top 50 volume traded ETF Options at the close on Friday? ETFs though were quite neutral and/or bearish. 

TradeScape

 

The most Unusual Call Options Activity at the close on Friday? The name that is super interesting is the 3x leverage inverse ETF from Direxion (SOXS) showing up at the top of the entire market for Unusual Activity on Friday. 

Discovery Scans

 

The most Unusual Put Activity at the close on Friday? HYG is the name here that stands out. 

Discovery Scans

 

Highest Energy Sweeps at the close on Friday? TSLA and SPY and QQQ all very deep red puts on Friday. 

Matrix Modes

 

Highest Energy Blocks at the close on Friday? Blocks were consistently bullish with SPX all week last week...interesting...

Matrix Modes

 

How were the Degenerate Prop Traders positioning with Leverage at the close on Friday? This crew jumps all over the trend changes and all these are calls on 3x inverse ETFs...hence the #leverageonleverage name for the scan. This plus the VIX activity warrants overall caution. 

Discovery Scans

 

What is in store for the Week Ahead? 

The CPI last week as not a double digit print, but it was >5.0...so a pretty hot print. Since then, positioning has shifted every day with bulls not able to make further advances. 

Quite a few things stand out, VIX is pretty hot into the close on Friday AND the degenerate prop traders were buying up calls on the 3x leverage inverse ETFs. TLT still has a bullish bend to it and HYG puts showed up on the Unusual Puts Scans numerous times. Meme stonks were also clobbered last week across the board and IWM is in a very precarious spot at the moment.

Ultimately, heading into this week, caution is warranted until the Institutional PMs and degenerate prop traders (DTPs) put down the VIX calls and the 3x inverse derivative calls and start buying meme stonks again (and find some buyside interest again in the Russell 2000). But we have to keep some perspective here as SPY and QQQ are barely off all time highs and both have strong volume at levels right below current price ($422 for SPY for example). Should you see continued weakness in the SPY/QQQ/IWM early this week and increasing VIX, then the ingredients are there for a little pain... 

MAKE IT A GREAT TRADING WEEK!!

 


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