INSURED FOR CALAMITY

This is the highest read for the Put/Call ratio since January’s landslide. They’re buying puts here into relatively quiet action, anticipating something on the horizon. Normally, they buy puts while the landslide is happening.

I bought some NQ here into the close and some $X calls for June. HAGW.

OA

I got trolled again today. 2:32 pm ET…moments away from the low of the day in the $RUT.

This guy is good too. Gets spooked from his stocks daily just to chase back in at higher prices.

Anyway, there’s my bit of gold for the day. Enjoy.

OA

You may have already seen this, but BAML clients have sold their stocks for a record setting 15 weeks straight. Wow.

Business Insider…

While a surge in commodity prices, led by crude oil, certainly helped to push the market higher, perhaps there was another underlying reason to explain the significant bounce: there was no one left to sell.

According to Jill Cary Hall and Savita Subramanian, equity strategists at Bank of America-Merrill Lynch (BAML), clients have now been net sellers of US stocks for 15 consecutive weeks, the longest stretch of continuous outflows since the bank first began tabulating the data in 2008.

That’s a remarkable statistic given some of the volatility witnessed over the past eight years.

The chart below, supplied by BAML, tracks net flows into US stocks from the bank’s customers, overlaying the movements against those in the S&P 500 index.

via Business Insider Australia

As it demonstrates, the selling in recent months has been significant, putting that seen in 2008, 2011 and 2013 — perceived “crisis” periods for markets — to shame.

According to BAML, net sales continue were led by institutional clients, while hedge funds and private clients were also net sellers during the week.

While the significant outflows could suggest that there’s an increased likelihood of an equally large correction — something that it signalled before the US mortgage crisis in late 2008 — given the size and duration of outflows and the reluctance of the S&P 500 to move lower, perhaps this is a contrarian indicator that recent selling has simply been exhausted.

Now that the market took a few weeks off, its imperative to look at the TYPE of stocks that did the bulk of the heavy lifting today. Looking through the types of names that were up 3% or more on the day were good quality names. Trucks, trains, resources, industrials, etc. The list isn’t filled with a lot of shitty stocks, but rather good accumulation of solid quality names.

Now’s a great time to sign up for the upcoming Boot Camp at the end of May. In this course we’ll be focusing on risk cycle, separating stocks from quality to garbage, and give you a checklist of items to follow to gauge the environment and anticipate rotations.

Email me with any questions. Thank you to all those who have signed up. It’s going to be a great camp.

OA

I bought June calls in these stocks, and picked up a LT position in $RIG yesterday.

I slayed the /NKD last night as well, and am still currently long.

As for the market, watch $IBB on a 5 day chart to see why it shook many of you out this am, and watch that low in reference to where we close today.

Small caps are stagnant as well, which I’m not totally sure matters yet. As I’ve been saying, its all about the Nasdaq here.

More later,

OA

Not sure what to say about the market today, other than it’s slow and somewhat productive. We could easily backtest the wedge pattern we looked at last week, but overall its constructive. Oil has been trading the $43-46 range, but if $43 gives way, could see a nice little slide lower from here. I’ve been debating selling a few oil names I’ve been holding.

Watching the banks in reference to Friday’s lows.

Biotech acts good here, no?

I picked up some $RIG for the LT account today and am stalking $SHAK and $CYBR.

What’s on your radar?

OA