Futures gapped up above the 380 level on no major news. It opened up at 381 and never looked back.
At 10am the market exploded up on the UofM consumer data and a revision of new home sales which saw a huge uptick from the expectations.
My only thought is that the data was leaked as to why the futures exploded.
The VIX broke at 10am and we rocketed up to 387 and just stopped for a few hours. Then the end of the day saw another burst upward and we closed at the high of the day at 390. We filled a 10 point gap in 1 trading session. Unreal.
What to Expect?
There are some major landmines this week on the calendar. But nothing until Wednesday morning.
Wednesday - GDP data in premarket, JPow speaking at European Economic Conference at 9am.
Thursday - PCE inflation data is released in premarket (this is the Fed's preferred metric)
What Do I Think?
Technicals - We are overbought on the 30 min and 1 hour charts. Still neutral on the 4hour and Daily charts.
Technicals - We cheated in futures on Friday morning and skipped a few levels. I expect us to at least retest 385.
We have a gap to fill up to 400 on SPY. This should get filled as long as the economic data this week does not come in too hot.
THE PLAY OF THE DAY
If we retest 385 on Monday, I will grab calls as I think we retest 390 again and ultimately head to 400.
I am not seeing much of a reason to play puts here unless we just knife right through 383. That would signal a 380 test is coming, so a quick scalp could be had.
However, I will be looking at calls at 385, and if the market keep diving, I will double up at 380.
If we break under 380 soundly, then I know any play on calls is risky.
As always all of this is my opinion and not financial advice.