Market Overview
The SPY is pushing back above the 21 EMA today, sitting at 771.02 with the 21 at 768.60 - this is just one close back above it after a rough stretch, so we need to see follow-through before calling it clean. The last several sessions were messy, with the index slipping below the 21 on October 22nd and grinding as low as 759.97 on the 23rd. Today’s bounce is constructive but the 8 EMA at 767.69 and 21 EMA at 768.60 are basically kissing each other, which tells you momentum is still compressed. VIX at 17.5 is not screaming panic, but it’s not complacent either. One close does not a recovery make - watch how the market handles this 768-769 zone going forward.
The dominant theme in flow this morning is SPX hedging, with multiple bearish risk reversals hitting across December expirations totaling well over $40M in premium - institutions are actively buying downside protection on the index. On the other side, there are a handful of bullish SPX risk reversals in the mix, so it is not a one-way street, but the bears have the heavier hand today. Semi flow is worth watching - SMH saw two separate ratio bull put spreads, suggesting traders are selling downside aggressively in semis as a bullish bet, while MU drew two bearish risk reversals with meaningful size, pointing to a split view within the sector.
Here is something interesting to show you that I have in my options flow.
A signal score that comes from my Signals Dashboard and a momentum match that comes from my Trade Analysis Dashboard. None of this is new it is in the relevant Dashboards in my Institutional Grade Trading Platform but u can access a view summary directly from the Options Flow Dashboard too.
Here is an example for today.
Click through the ticker to the chart:
Click the Bulls Eye Emoji for the Momentum summary:
Signals score summary:
In the same way, if a record has earnings within 5 sessions the flow will be marked with a calendar emoji, wave emoji if dark pool flow and eyes emoji for insider flow. All are clickable into the underlying data
