By Eli, Tommy
Snap-back rally day 2 on a solid followthrough off Tuesday's reversal. Institutional sweepers leaned bullish from the get-go yesterday and continued to drop bombs in the relation names.
Energy continues to scorch higher and saw aggressive call buying. Energy pipeline names like $Energy Transfer LP(ET.US)$, $Plains Group Holdings, L.P. Class A Shares representing limited(PAGP.US)$which have lagged recently, starting to put a solid rally together as well now. Both $GameStop Corp(GME.US)$ & $AMC Entertainment Holdings Inc(AMC.US)$ caught fire on Wednesday, both were active earlier in the day before the rip. AMC off being part of that "re-opening" theme. On the other side of this really aggressive shift in sectors over the higher rates, saw the shortest dated speculative activity in selective growth names today ($Advanced Micro Devices Inc(AMD.US)$).
On the sentiment front
Short-term sentiment lifts higher with the indices yesterday but still leaves room for further upside if they want it. The lack of full participation from all sectors in this rally is likely keeping sentiment from cooking as quick. As a matter of fact, sentiment in the groups on the sell side of this rotation has cooled off nicely this week.
And that's what we need to pay close attention to here. Keep an eye on the most aggressive sweeper activity as that's been a fantastic gauge on where the current momentum lies. A lot of the rallies in these higher rates/reopening plays are extended now. It can certainly overshoot to the upside, considering how aggressive both the flow and price action has been in these groups but we want to remain tactical in these names until we get some sort of breather.
It's the other side now which offers the better risk/reward but sweepers don't seem to be nearly as excited there yet. There is also a possibility that they focus on the more speculative stuff, like GME AMC microcaps, if they need the reopening trade to breathe.
Notable bettings toward broader market indices ETF on 2/24
Market-wide option volume of 43.4m contracts was in line with recent average levels, with calls leading puts 2 to 1. ETF and Index products saw relatively heavy volume, while single stock flow was moderate.
Individuals breakdown by sectors (2/24 notable bets)
Most active sectors included Industrials, Energy and Financials while Telecommunications and Health Care were relatively light. Of the 3,795 stocks with listed options, 2,874 (76%) closed higher, and 838 (22%) lower. Among the 500 most liquid single stocks, 30day implied volatility was higher for 235 and lower for 214. Unusual total option volume was observed in $General Electric Co(GE.US)$, $Boeing Co(BA.US)$, $Energy Transfer LP(ET.US)$, $Workhorse Group, Inc.(WKHS.US)$ and $Square, INC.(SQ.US)$.
Tech
Industrial
Consumer Cyclical
Financial
Communication Services
Healthcare
Energy
Real Estate
Basic materials
Consumer Defensive
Options Montage from moomoo news team, the most exclusive and insightful order flow details we delivered. They provide increased cost-efficiency, they have the potential to deliver higher percentage returns and strategic alternatives.