The market just did something it has literally NEVER done before.
The S&P 500 traded $2.6 trillion in call options yesterday.
The highest single day call volume in market history.
When traders buy massive amounts of calls, the market makers selling those calls are forced to hedge by buying the underlying stocks.
That buying pushes prices higher.
Higher prices force more hedging.
More hedging pushes prices higher again.
This is called a gamma squeeze.
It works incredibly well on the way up.
It’s brutal on the way down.
The same loop that drove the S&P higher every day reverses with the same force when the calls expire or the trades unwind.
We’re no longer watching investors price in earnings or growth.
We’re watching options flow drag the largest index in the world.
The question is not if it unwinds, the question is when.
you want to know which stocks we’re buying next, turn on notifications this is VERY important.
Many people will wish they followed us sooner.
Just have in mind that the administration is using hedging flows to sustain valuations.
The timings of Trump key dates are def in line with someone who knows where flows are weaker and how to use them to push markets higher
one lesson i learned a few years ago is that the animal spirits essentially believe everything is bullish
all the doomers who spent the last month calling for limit downs every weekend have now watched the fastest rally in HISTORY off a low
unemployment goes up, bullish bc the fed has to cut and inject money
unemployment goes down, bullish bc the economy is strong!
war starts, bullish bc it means more printing, inflationary
war ends, bullish bc of peace and less uncertainty
the US markets have a 100% recovery rate. 100%. so it's just about finding opportunity within that