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DrosNotes - 05.24.2018 - To Kim, Or Not To Kim


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An overview of the market activity on Thursday, May 24th, 2018.

A guess at the explanation some of the action today as well as some of my favorite trades, and what to look for in tomorrow;s session.

Published in: Economy & Finance
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DrosNotes - 05.24.2018 - To Kim, Or Not To Kim

  1. 1. DrosNotes MarketRecap May 24, 2018 TO KIM, OR NOT TO KIM? A Wild U-Shaped Day and a Holiday Weekend Markets pulled a full U-turn today….in a U (or V) shape… Gold followed through on all the blocks and options we say traded on Wednesday. Bonds also kicked into gear; such that I picked up some $TMF equity [20+ year treasury bond 3x bullish ETF}. Now let me say one thing and let me say it clear…if anyone asks me about “Sell in May and Go Away” I’ll probably just tell them to go away. For good. Or read this. The statement is an old one because of the infamous trader lifestyle for those living in the city. Your kids would be finishing up school, your wife would probably be saying how Jill and Alexandra already went to their place in the Hamptons and the two big parties she already missed. If you follow along how things have changed since then…the correlation has 1 $SPY chart for today. Look at the tiny volume driving the moves and how steady the OBV and Chaikin Oscillator remained.
  2. 2. DrosNotes MarketRecap May 24, 2018 gotten much weaker. Why? Blackboxes. Algorithms. The “big swinging dicks” of the street (to use a Michael Lewis term) aren’t really going in and being aggressive as often as they used to…without the help of those lovely computers. So be they in the Hamptons or not, they’ve got fail safes in order. I think today was a shakeout of sorts. Tomorrow is a weekly OpEx..and because of all of these trade tensions there were a lot of people net short that needed to drop the market down. The futures are already up fairly large. I’d imagine tomorrow will indeed be a low Trading Notes: - $PCG heavy bull flow today - $CRM MASSIVE block that then drove the stock higher. - Bonds and Gold continue to push up and retreat. Silver is a standout of the commodities. The dollar has been rather choppy as well. - These trade talks and the NK/SK stuff has been back and forth for weeks/ months now. They’re obviously just playing games. I’d keep on some long volatility exposure here. I also bought some $DOG equity yesterday as a hedge. 2
  3. 3. DrosNotes MarketRecap May 24, 2018 So the dip today, if anything, was to ensure they could get rid of their short positions/puts with some profit. Market makers have to shake out some people as well. Markets almost always close bullish before holiday weekends. I’d look for a rise tomorrow. Options bets lined up like this overall for the week. 
 And then for today they looked a bit more like this…. 3
  4. 4. DrosNotes MarketRecap May 24, 2018 4 It’s been an already shortened week (with Monday being closed in countries all over the world for Commonwealth Day) and tomorrow should be fairly uneventful with “the boys” on their way to the Hamptons. Take advantage of tomorrow to lock in some profits or swing-trade. The markets remain shaky internally, but tomorrow should be bullish price-wise. If any.thing REALLY sharp comes in I’ll let you know. The trade-room has gone beta only mode for the time being as I develop it….to join the waiting-list for the final room and also get a chance to experience the growth of the room, come join and then message me there. Over the weekend I’ll get more into the implications of the Fed Unwind…and the state of the markets from here. Cheers, - dros