By Eli, Rachel
Same old story out there on Wednesday, buy re-opening, sell high growth/tech. Institutional sweepers continue to plow into inflation/reflation leaders, while the bulk of the put buying remains focused on ETFs and growth.
$United Airlines Holdings Inc(UAL.US)$, $Las Vegas Sands Corp(LVS.US)$, $Boeing Co(BA.US)$, $Exxon Mobil Corp(XOM.US)$, $ONEOK Inc(OKE.US)$, financials and travel leaders have been absolutely tattooed over the past couple of weeks.
On the sentiment front
Recent volatility hasn't had a noteworthy impact on intermediate-term sentiment yet but the selling has been in just half of the market so far.
Hedge Fund Exposure source: sentimentrader
Hedge funds spit up a bit, trimming some of their recent long exposure after getting a bit more aggressive buying into this recent dip.
Institutions are still primarily focused on this "re-opening" theme but continue to plow into the leaders for the most part. There has been some recent activity in underbelly commodity plays like $Teck Resources Ltd(TECK.US)$ and $Amyris Inc(AMRS.US)$ yesterday but we haven't seen many fresh names, the most aggressive aspect of the flow has been in the more well-known cyclical plays.
That will change, eventually, there's still a potential drawdown risk across the board here because the more they hammer growth, the higher the odds they'll need to sell winners as well to meet margin calls. Our best entry for swing positions will likely come off the selling where everything is highly correlated. In other words, when everything finally pulls back together with the indices and there's nowhere to hide, this phase can come to an end.
But when will that come? NO CLUE, for now, a tactical strategy remains the way to go, they are not really showing much excitement in growth yet, selectively dabbling for just a bounce.
Notable bettings toward broader market indices ETF on 3/3
Market-wide option volume of 43.3m contracts was in line with recent average levels, with calls leading puts 13 to 8. ETF and single stock products saw relatively heavy volume, while index flow was moderate.
Individuals breakdown by sectors (3/3 notable bets)
Most active sectors included Financials, Industrials and Consumer Cyclicals while Health Care and Utilities were relatively light. Of the 3,814 stocks with listed options, 1,596 (42%) closed higher, and 2,124 (56%) lower. Among the 500 most liquid single stocks, 30day implied volatility was higher for 333 and lower for 107. Unusual total option volume was observed in $Bank of America Corporation(BAC.US)$, $Rocket Companies Inc(RKT.US)$, $SOS Ltd(SOS.US)$, $UWM HLDGS CORP(UWMC.US)$ and $Boeing Co(BA.US)$.
Tech
Industrial
Consumer Cyclical
Financial
Communication Services
Healthcare
Energy
Real Estate
Basic materials
Consumer Defensive
