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STOCKS – ZM, SQ, AMZN
MACRO – SPY, VIX
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Stocks tried to rally on September 1. Inflow day started strong but faded into the close to end the day flat. The VIX really may have been the key here, there was some decent put volume trading on the S&P 500 that rolled through later in the day, and that seems to give the VIX what it needed to push higher, sinking the S&P 500.
The VIX also found support at our uptrend line that has been working fairly well since the beginning of July. That has really been key and has in the past marked a turning point. If it continues to hold, it would suggest a higher VIX in the days ahead, potentially back to the long-term downtrend around 20.
S&P 500 (SPY)
The chart on the S&P 500 is looking sort of iffy up here, especially if the VIX continues to climb. The pattern on the 10-minute intra-day chart looks kind of double-toppish. Unfortunately, we won’t get confirmation until the index falls below 4520. A natural place to revert to is at the 4,440 gap fill.
The 10% run-up in Amazon really appears to be entirely attributable to a gamma squeeze. The signs were there, rising implied vol and call volume, falling skew. It appears the squeeze is now over, and given where the shares are; we should see a reversion lower.
The 3,520 levels appeared to be strong resistance.
Square is getting closer and closer to breaking the uptrend. The stock moved up on Monday and gave it all back on Tuesday, and did nothing today. The stock is probably dead money until the Afterpay deal gets completed. They are using the stock as currency, which is dilutive to existing holders since more of Square’s stock will be issued.
Zoom did not have an impressive day after falling nearly 17% yesterday. All it could do was gain 50 bps today. If that was bounce, the stock has a major problem coming at it. It might get to $230 really soon.
That’s all for today.
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