To The Moon

Two consecutive gap-down sell-offs have left truly ugly technical pictures across indexes. Brace yourselves, as the consolidation periods ahead are likely to be exceptionally volatile. While there's no identical precedent, the 2019 large sell-off and subsequent choppy ranges could offer some reference for mental preparation: The single-stock options market was eerily quiet in the first half of Monday's overnight session. An unsettling calm, as if everyone has already passed their hands this round. To supplement on Tesla, it's unlikely TSLA can hold above $220 this week, though the $200 level should offer some support technically. I had originally planned to buy straddles tonight, but in this market environment, no one seems interested in that strategy. Likely due to bloated implied volatilities and accelerated time decay eating into premiums in such choppy conditions. For index products, the overarching flow remains bearishly-positioned: For SPY, it's simply a continuation of put roll programs, typically out to the September 20th monthly expiration cycle. QQQ activity was even more abstract, with institutions heavily buying into some bizarre calendar put spread formations: Buy $QQQ 20241220 244.78 PUT$ Sell $QQQ 20250117 244.78 PUT$ (Same structure for 214.78 and 204.78 strikes) What scenario could possibly justify putting QQQ at half its current level? This has to be a wager on a 2008-style market maelstrom requiring a new administration to ultimately ride to the rescue, right?