Rate Cuts & GME | Stock Market News

what's up outliers quick market update I want to talk about two things the first thing is just some general broad Market updates and flow as we're getting into this next interesting period next week of the Fed rate Cuts expected on 18 September and then I want to talk a little bit about GameStop just because we came up on another expiration so I'm going to get us prepped up for our GameStop live stream tomorrow at 5:00 p.m. Pacific time so let's get right in what's going on in the market a pretty big turnaround that's what I noticed this week RIT large so if we take a look across the different sectors we can see that the S&P 500 is now kind of hovering right near all-time highs again it's rallied right back up it's had a fairly one-sided move starting from the 9th we can see Tech is still rallying um it's lagging behind the s&p500 still and it is still a bit away from alltime well near term highs I should say here as compared to spy and then the Russell caught a really big bid today except it still is not even getting near its near-term lower highs let alone near-term highs so the Russell is also lagging quite a bit vix is down 16 and a half bonds are up so what's going on here well in my opinion it looks like the market is starting to to price in a little bit more this whole probability of a cut and we're trying to see how things are going to settle you can see for the New York Stock Exchange net highs lows the net lows essentially evaporated um there's on a gross low basis there's 10 so the New York Stock Exchange is really starting to take off pretty meaningfully here and if we take a look at the NASDAQ it's still you know gaining momentum but nothing near like what you're seeing in the New York Stock Exchange so from a a broader perspective here the market I find to be at a still a very interesting point I don't read into this move too much I'm playing it I'm both long right now um Futures and options in all of the indices I have positions in e- minis q's and Russell and that's mostly just following the movement at this point it's not that I'm fully sold and baked in on what this movement looks like because a big thing that's going to start getting factored into pricing soon is what we think about recession it's a little too early to worry too much about it yet but that is going to become increasingly topical last I saw from Goldman Sachs they had an article out that talked about like a 20% chance of recession which I argue still seems a little low to me not that I know better than them I just can't help but think that after everything that's gone on to think that it would be that low just seems not highly probable but again that's just based on essentially intuition so I wouldn't wait my opinion there too heavily so that's that now as I already mentioned we do have a big rate cut coming soon and when I say rate cut it's been priced in for some time now we've been looking at essentially 100% probability of a cut since this new um this expiration became the front expiration so on 18 STP is what we're looking at now you can see what bonds were pricing off of and here's the interesting point it used to be really high probability of 25 basis points now it's like 50/50 between 25 and 50 basis points this turned a relatively not exciting event in my opinion into quite an exciting event the reason is because I felt the probability of a 25 basis point had been priced in for some time and we can see that because across the futures if we look at the bond Futures you can see that you know they've rallied but their volume has already started dying down it's not like the volume is pouring into bonds at this point it's really not so there's this really interesting phenomenon that we're seeing because I think most of this probability of a 25 basis point cut probably started getting priced in pretty heavily back here and we've been you know Meandering sideways here but the Revival of a 50 B basis point cut I actually think starts to make this look a little more interesting and the ability for that to have a little bit more of a market effect I think is pronounced but if we look across again 30-year bonds here for the last week essentially it's been running below both 5day and 20-day average volume if we take a look at something a little nearer term and we use 10 years you'll see the same exact thing it's been below volume most of the week and then if we go even CL are still look at the 2-year it's about the same still so bonds are being bought no doubt and I think most people have already captured most of this move this is again a reflection of the market as a discounting mechanism for those that are thinking like oh I want to get into bonds today because I think the Fed rate Cut's going to move prices literally like not even days late over a month or two late that already has happened again you can see that back here clear as day that's exactly what this is now it continues to drift up I'm not saying that this is the maximum of the move or at all that it can't continue it sure can but all I'm saying is that if you're arriving to that conclusion now you you are late to the party so that doesn't mean you can't play it but it just means you now have a higher risk trade because if for whatever reason the economy starts faltering it starts looking a little bit ugly to the down side then we don't really know exactly how bonds are going to behave there because the the bond Equity relationship had broke down pretty meaningfully throughout 2020 until almost present it's just now just starting to normalize so I don't even think it's fair to say like oh yeah if you know it starts looking like recession bonds are going to look really good maybe I mean we might think that but we also have to understand the rest of the conditions that are around us because again correlations change over time and they did pretty massively so for people that used to run risk-on risk-off portfolios using equities bonds they were getting massacred over the last few years because the relationship broke so yeah that's kind of what I see going on with the bond market now the other thing I want to take a look at is the movement of capital between the sectors I find interesting so if we go to institutions and this is looking more at like value institutions I'll open this up a little bit so that you can see over here and there's a few things that jump out at me when I'm looking at this down here is when we look at where most of the exposure is again we can see technology is Contracting it continues to contract quarter over quarter so it hit its peak concentration like back in here which is around Q3 of 21 Q2 22 somewhere in that range and it's been contracting ever since uh that's a lie it did tick up here my bad I lied to you where where is this this is like yeah 2023 Q2 is but then it's been contra rting from there for real this time so this idea that like we're heavy Tech concentration I actually think is a little misguided at this point now it's important to also understand this is looking at when we're looking at sector exposure and people if we look at individual products we can absolutely see that we're still very very very heavy into Tech right so if we sort this by ads you can see birkshire is coming up really big Google um Aon MSC msci ACN Baba so it's like a a healthy mix of things and if we take a look at offloads or kind of the smallest ads it's been in energy which again that's no big surprise because if you take a look at Energy's composition in these portfolios it's been super super low for some time so what I'm noticing from an expanding standpoint is if you look at Industrials they're starting to open up a little bit you're seeing consumer defensive it opened up kind of started closing back down I don't think there's a lot there that interests me at the moment just from a flow perspective and then we absolutely see Financial Services opening up so in when I say opening up I mean consuming more of uh transactions and the percentages of portfolios so to recap all of that from what I see now I think the market has already largely priced in a 25 basis point cut if not a 50 basis point cut probability at this point I think if it it is a 50 basis point cut the market will probably move pretty heavy off of that because it'll still be relatively new news um that's not fully priced in yet cuz it's even still less than a 50% probability but if it keeps trending that way I think it becomes more probable so interesting Market Behavior this week and this is where again until the market decides if it's going to go left or go right this is exactly where I I like to trade these markets but you got to be really careful and I use really tight stops even this the stuff that I'm running in the NASDAQ I just follow it all the way up and for things that I typically would handle a previous retracement without batting an eyelash I would rather just get out watch and then go back in I haven't been knocked out yet but I have literally orders resting right now to to start dropping me out if need be all right so let's switch over to GameStop quick then for those that don't know later today at 5:00 p.m. Pacific time we have the outlier options trading for beginners series that's at 500 p.m. Pacific time and we dive into the world of options for beginnner so it's a chance to get your feet wet we've been doing I think this is going to be our 14th episode so we're going to have a quiz and it's really just designed to help people sharpen the sword get more familiar with options more comfortable with how they fit in the portfolio understanding the difference between things like profit mechanisms and how to capitalize on them with options because options get a bad rap but it's because people jump into them too fast is what it boils down to so going over to GameStop little bit of an update today that was absolutely awesome to see inside day 1.23 3% up but it's still hovering right above 20 so the fact that it's continuing to hold this is good to see and if we take a look at volume we can see that there was a spike of volume leading into earnings post earnings another Spike of volume and then if we take a look even at these last two days although these last two days seem insignificant compared to the prior 4 these last two days are still much larger than a lot of what you saw in here right so today we had 8 million volume 92 million volume yesterday if we go back to a random sample during this period it's 4 1/2 3 and 1/2 so much much much less volume in here so there's still elevated volume and I think that that's an important note because it tells me that we're still supported here now whether it breaks down below this TBD don't know yet but I like the fact that it hasn't yet and I'm keeping a pretty close eye on that now let's jump over to the options chain and we have a few things to go over in here so today we had 172,000 calls against 49,000 puts so way more calls traded and again this looks like mostly moving out into the next expiration right so we can see a bunch of these 13 septembers these are almost assuredly trades that are coming down and these 20 steps are going to almost all be opening trades for people moving out into the next primary expiration open interest still hovering right around 73 30,000 calls against 361 on the put side and it's still a healthy mix of call open interest across different expirations I'm not seeing any sort of massive concentration here that leads me to believe that you know the market is pricing something in or the market thinks something in particular is going on I just don't get that sense at least as of right now so let's take a quick look now at any interesting trade volume that we've had come through I'm going to get rid of the puts for now I'm going to get rid of the bids for now and I'm going to limit it to just today to kind of clear out some of that noise we had a couple trades that looked interesting to me but so we have the um 18th of next month the 15 calls I thought those looked a little off place but not much it is a bigger trade 287,000 again that's not big by typical GameStop standards when things are like really busy but it's something I'm just looking at and then we have another $174,000 trade but this isn't out until 2025 so yeah you know future dated positioning totally fine but beyond that just pretty quiet in here not much to to highlight that looks really interesting to me or anything like that now I do want to take a look at the dark pool really fast and see what kind of transactions we had today and and if we take a look there's a bunch of those 5000s again so I'm going to do is sort this by size see if the 5000s are in here typically they're not because there's a bunch of much bigger transactions like these these are actually interesting well before I'm going to look at just today though and let's see so we have yep look at all these fives again this is like this has been non-stop the last few days so let's count so and there's a couple over here that are like different sizes right 5500 but these what is this it's like over 30 maybe like 35 or so and then I see a couple High fours so interesting really interesting I don't know what to make of the fives the their activity has been ebbing and flowing so if we look at this over the last week for example I'm going to filter by just those 5,000 and again these are not options these are shares and now I'm going to sort it by date so that we can kind of see how it es and flows so you can see on the 12th was massive right absolutely massive number of transactions then on the 13th there's still again over 30 I would bet but not like an insane amount like the 12th then if we go to the 11th it's more than the 13th less than the 12th we go to the 10th it's less than both of those the ninth less still the sixth and we run out of um space at the bottom we run out of returns so it I just can't help but find it interesting I don't think that again I'm not suggesting that this is the same person trading here nobody has a monopoly on this side but I just can't help but find it so interesting so right now my main goal here is to just continue following these shares through the dark poool and I just want to see if there's a change in the number of 5,000 returns that's what I'm looking at right now is obviously that's what I see over the 12th to today and that's what I'm keeping an eye by on because the options change right now is quiet it is what it is is is exciting as I would prefer it to be right now it's quiet the stock price itself is quiet which again as we with GameStop it's quiet until it's not so that's all we got for today as always let me know if there's anything I should take a look at be an outlier I'll see you guys later