Bull Week in a Bear Trend
Review of Week January 9, 2023
What changed?
Did inflation drop drastically? Did the Federal Reserve say they were going to stop raising the Fed Funds rate? Did last year’s participants in the November 2022 Big Quit go back to work?
No. No, none of that happened.
Rather the GAMMA SQUEEZE was back in play.
Do you remember GameStop?
Dead company getting catapulted to new highs. This week it was SPY and Bed Bath and Beyond all due to something most investors know nothing about, Zero Days to Expiration Options or for short 0DTE.
What is a 0DTE? Options that expire the same day they are issued. What will they come up with next?!?
SPY was the main player. Zero Days to Expiration Options force Option Dealers to sell volatility suppressing volatility in the very short-term.
Which brings us to Tuesday the 17th of January.
There is a high probability that we will see a spike in volatility (I follow the VXN) and we will see a continuation of the intermediate downward trend.
Remember, economically, nothing has gotten better in the last week. When it comes down to it, earnings and growth matter.
QQQ Weekly Chart
Still in a downward trend
MSFT Weekly Chart
Still in a downward trend
Apple Weekly Chart
Still in a downward trend
Amazon Weekly Chart
Still in a downward trend
I track the top ten companies base on asset share of the QQQ ETF. The top ten represent just over 50% of the assets in the QQQ’s. MSFT, APPL, and AMZN represent 29.58% of the QQQ’s assets. If one of these gets a financial upset stomach, they can move the index.
Enjoy your long weekend.
Live Loud!
Trent
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