If you opened up your long-term account this morning, there wasn’t much to smile about, so here’s me in my Halloween costume.
And before you guess wrong, I’m Mike Ditka, darn it.
It’s a market bloodbath out there today.
Two weeks in a row, we’ve had an ugly Thursday and Friday, and both times buyers came in Monday and popped it.
I’m not sure they do that this time.
The election is Tuesday, and there aren’t a lot of earnings left to bail anybody out.
However, that doesn’t mean there aren’t opportunities right now because there are.
Below, I’ll show you the levels I’m watching and where big money is quietly adding to winners while everything else falls.
The Monday Rescue Won’t Have Help This Week
Look at the last two weeks. The week before last, we were down Thursday and had a big ugly day Friday. Last week, it was a big ugly Thursday, and we still closed down Friday.
After each of those days, we saw a pop on Monday. A rough Thursday and a rougher Friday can also lead to a crash on Monday, and we saw that during COVID.
This Monday, the election is the next day. Do you think traders or even big banks want to stick their neck out between now and Tuesday?
The Levels I’m Watching
SPY, the fund that tracks the S&P 500, is making a real break lower today, down into its Sept. 16 candle. I wouldn’t be surprised to see it get down to $754, and I think the S&P 500 index closes below 7,600.
The QQQ, which tracks the NASDAQ 100, looks even worse. It’s below its September lows and below $700, and we may be targeting $660.
I’m taking a hard look at SQQQ, a fund that rises when the NASDAQ 100 falls. And VIX options, which pay off when fear spikes, may not be expensive enough right now.
Big Money Isn’t Leaving. It’s Rolling Higher.
With everything falling today, I’m watching traders in Exxon sell their November 170 calls and buy December 190 calls. In Chevron, they’re selling the November 220s and buying December 240s.
They’re closing a winner and rolling it higher, and that’s often my favorite kind of trade. Chevron is up about $4 today, with the market down as big as it is, on Iran fears.
It’s showing up in my own trades, too. One of the stocks I got into yesterday is down less than 1% today while the QQQ is down about 3.25%, and the calls I bought are up. When a stock holds like that in a bloodbath, it tells me I found a good diamond, which is what I call the trades my scanner flags.
Where I Find The Diamonds
That scanner is The Mine, the tool I built to read the options market the way I did as a market maker. It takes the tens of millions of option trades that hit every day down to a few hundred with the signature I’m looking for, and then I work them down to the handful worth trading.
Our first live Mine session is Monday, right after Strike Force. Here’s what you’ll see:
- How to tell when big money is cashing a winner and pressing higher, like the energy rolls I’m catching today
- Why a stock that barely moves on a 3% down day can tell you more than one that rips
- What it means when open interest climbs day after day before a stock even moves
- The flow I’m watching live on Monday, one day before the election
===>Show Me What The Mine Sees
Your only option,
Mark Sebastian
P.S. If you own a lot of tech going into Tuesday, look at VIX options before you look at anything else. I think they may not be expensive enough yet.