Last week was an impressive showing from the bulls. The strength in the energy patch trumped any softness seen elsewhere. Biotech even managed to spit out a concentration of 41 big winners (+10% or more on the week). And despite being wrong last week with my bear call, I am back on it heading into option expiration week.
There are these models I build. They are part of my weekend research. Lots of index data is put onto a spreadsheet and graded. Then I add a layer of Exodus which factors in fundamentals. It’s all pretty simple but at the same time comprehensive and that’s why I like it. Right or wrong, I know I did my homework, utilized the resources I’m fortunate to have, and used them to form an objective bias—no one’s master, no one’s slave.
Option expiration week sees a rally lately. The past several months have seen a rally up into OPEX Thursday then a dump shit month-end. Something feels different about this month. Change is afoot. And what better way to end the month with a catapult-style rally then to suck in a fresh batch of shorts during option expiration week?
That was a ferocious 8-day rally. It likely served to flush out the weak shorts. The market cannot sell off with weak shorts in place.
So while I am bullish on the month of October, and positioned to benefit from more strength, I have a short bias this week. I will look to lean harder into my NASDAQ shorts this week and potentially add to my BIS position.
Exodus members, the Weekly Strategy Session has been published.
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