The Stock Market Is About To Go Crazy

[00:00:00] Speaker 1: The stock market started off the week by selling off. The S&P 500 today closed at 75.15, down 0.78%, and basically right since the open, it was a slow grind lower. I've got the 15-minute candlestick chart pulled up here. Along with the GAM exposure data and our cumulative net flow, you can see GAM exposure is still skewed positive. Most of the GAM exposure, as we've been discussing for the last couple of weeks, is primarily between 7,500 and 7,600 on the upside. Cumulative net flow was leaning largely negative, largely bearish, down to 7,500. Despite today's pullback, though, we think this is a buy-the-dip opportunity for a couple of main reasons here. One, the S&P, broadly speaking, is breaking out, or at least attempting to break out, of this large wedge pattern after the big run-up that started at the beginning of April. The second main point is that we are in a strongly positive GAM exposure environment. That is a classic buy-the-dip environment. You may have a pullback for one or two days, and that's typically a time where market participants reenter into long positions, at least on a short-term basis. Our market net bias, which actually looks at SPY, QQQ, and SPX, is largely positive here, positive 740 million. That means that there was big bullish net flows in the options market across the major indices and index ETFs that we track, even though the market was down today. All of this to say this is likely a buy-the-dip type of day, even though we did see a little bit of a pullback. We're expecting market participants in the next day or two to come in here right around the 10- or 20-day SMA, start buying the dip, and we could see another further leg to the upside, potentially to 7,600 later this week. [00:01:46] Speaker 2: Thanks, Anthony. Let's take a look at the VIX, which has seen some interesting movement. Friday, we saw the VIX close right at 15, and that's a level that we've been identifying as a potential bottoming zone for volatility, based both on the net GECs that dies off after the 15 strike, and also based on going back over a year. You can see generally where the VIX is bottomed in this 15 zone, so it was not a surprise to see a reversal from that area. But what we're dealing with now is the VIX sitting at an interesting spot right at the 9 SMA, and now that the VIX has reversed back above the HMA and is sitting at the 9 SMA, in my view, this raises the risk of at least a short-term spike in the VIX with possible continuation up toward the 19 to 20 area. We have a lot of positive and negative GECs at 20. Also, our cumulative net flow, showing the net action in the options market today, was pretty heavily toward the positive side at the 19.5 strike. With OPEX week this week and VIX monthly options expiring the following Wednesday after OPEX Friday, it's hard to envision any sort of negative trend lasting just based on historical precedent. And so, as always, we'll be watching key levels, you know, either settling back toward 15 or getting a little wild toward the 20 to 25 area. So, we'll be watching that. [00:03:15] Speaker 1: Thanks, Sean. I wanted to take a look at a couple of the performance leaders in the market over the last 30 days. Palo Alto Networks is one of those. Today was up another 1.31% closing at 330.19. We've seen a pullback over the last week in Palo Alto back into its major moving averages, the 10 and 20 day moving averages. We've got strongly positive gamma exposure going all the way up to the 400 strike. We also had cumulative net flow pretty big at the 320 strike, which was near the lows for the day and actually bouncing to close at 330 right off of that 20 day moving average. There's a lot of factors here that make me think Palo Alto is setting up for another leg to the upside up to that 400 strike, especially as a swing trade looking out over the next four to eight weeks. And as I mentioned, Palo Alto being one of the market leaders, you know, Palo Alto really broke out above this 200 level back in early May. And since then, it's just been on an absolute tear, getting as high as the 360s here just about a week, week and a half ago. Recently, we've had a number of successful trades in Palo Alto Network over the last month or two. Our most recent trade, we actually closed out back on June 29th, locking in $1,315 profit on our July 17th, Palo Alto, 300 330 call debit spreads. And you can see from our post at the time, Palo Alto was breaking out of this consolidation period that we had highlighted here on our chart. This was really the impetus for entering a position. We had a pullback into these major moving averages with all this positive gamma exposure setting up for an upside move. And we actually got a breakout and we were able to lock in some really nice profits on that trade. And I think this is the same type of trade that is setting up currently in Palo Alto Network. So we're going to be taking a look at adding this to our 10K portfolio this week. By the way, you guys can track our trades in real time by becoming a member at GeeksOfFinance.com. You can also get a sneak peek of what we're trading right now by checking out our community discord absolutely free. Links in the description below. [00:05:20] Speaker 2: Anthony, I think we're getting close to a time when it might make sense to pay more attention to gold, specifically GLD. And our viewers may remember that we've traded GLD in our income portfolio. We ended up pausing the strategy around the June 11 timeframe as we saw these recent lows breaking. And, of course, that has been a good decision so far. We are approaching the lower weekly Keltner channel, which is one of the indicators that I like to use. And it's also the last major Geeks cluster at this 350 area. And you can see the HMA is also approaching this lower Keltner channel. So, you know, signs do point to the potential for more downside. When we get to this 350 to 360 area, you know, I think it's really going to be a time to watch closely. And with GLD at 367.20, we're awfully close right now. Another thing that I'm looking at, you can see down here are historical Geeks. The most recent reading at today's close was almost negative 200 million. And GLD has a pattern of reaching extreme positive and negative Geeks readings near tops. You can see with these readings that were well over a billion, these marked tops. And now that we're getting down into deep negative territory, another 200 to 300 million on GLD to the negative. And this also may mark an extreme that could be a contrarian reversal signal. So, you know, once we see some signs of reversal, especially if we can see GLD work its way up, you know, break this downtrend, getting back to the 400 strike, there could be some interesting days ahead for GLD. So we'll be watching the 350 to 360 area if and when GLD approaches that zone. And we may even restart our income strategy if it starts to look appealing to us. Thanks, Sean. [00:07:13] Speaker 1: I want to take a look at another market performance leader over the last 30 days. That is Shopify. Shopify was up another 1.8% today, up over 15% in the last 30 days. You wouldn't really know it by just taking a quick glance at the chart. But really, this low that was put in earlier in May was below 100, and now we are up at 124.74. So big, big move over the last, you know, one to two months. And we're getting to an area which has been a larger basing pattern over the last six to seven months. And I think this is approaching a larger breakout zone for Shopify. That combined with positive gamma exposure, you know, we've seen this positive gamma exposure sitting here for the last couple of months. This is open interest in longer-term option positions, and I think there are some market participants out there positioning for a big move to the upside potentially into year-end. Also, if we take a look at our cumulative net flow, it's positively skewed cumulative net flow at all these strikes. So this is mostly, for example, call buying and put selling at these strikes between the 125 and all the way up to the 150 strike. Now, the options market isn't a ton of volume, so you can see some of these numbers here are a little bit lower. But nevertheless, the pattern and the data are pointing to a potential breakout, and I think this could be a decent longer-term swing position. It's something that we're going to be looking at adding into our 10K portfolio for a potential breakout above this 130 level, heading up to the 140 or even the 160 strike in the next four to eight weeks. And guys, we just launched our Geeks summer sale. You can get an additional $300 off our yearly portfolio manager tier subscription. Use code SUMMER26 at checkout. This discount's going to be ending soon in the next couple of weeks, so definitely take advantage of it while you can. Members get full access to our GAM exposure dashboard, our option flow analytics tools, as well as our algorithmic trading strategies. And you'll also get access to the premium channels in our community Discord. We've got a ton of great members in there sharing their own trade setups and strategies. And you can also track our trades in real time as we manage our options portfolio. It's a great resource. Definitely check it out when you get a chance. Links in the description below. Thanks so much, everybody, for watching, and we'll see you guys in the next video.