Peace Sells Are You Buying It?

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The S&P 500 (SPX) finished the week nominally higher. The advance/decline line told a completely different story.

Market breadth is broken right now. Fewer than a handful of stocks are driving the entire rally, and the engine behind it is a gamma squeeze, not fundamentals.

In tonight’s video, I walk through exactly what’s happening under the hood:

• SPX and SPDR S&P (SPY) options combined for 15 million contracts today alone. Add Nvidia’s (NVDA) 7 million, and just three products accounted for over a quarter of all options market volume.

• Broadcom (AVGO) hit the upper edge of its expected move four consecutive weeks, with nearly three standard deviation moves each time. The options market is mispricing forward risk.

• AMD breached its expected move four straight weeks. This week’s move came in at nearly three and a half standard deviations.

• Volatility futures finished higher today even as markets rallied. The S&P 500’s expected move for next week jumped from $111 to $130, and the tradable volatility products are not pricing anything down.

• Oil near $100 a barrel is the tell nobody is discussing. Historically, oil above $85 has not been a good backdrop for sustained equity rallies.

Forget the FOMC. Meta (META), Google (GOOGL), and Microsoft (MSFT) all report earnings the same night the Fed speaks, and that’s where next week’s real volatility is being priced.

Home builders are a short I like right now. They got swept up in the broader squeeze with no bullish thesis behind them.

Goldman Sachs (GS) and Morgan Stanley (MS) are both approaching highs and starting to roll over. I walked through setups in both tonight.

I also showed my actual 0DTE results from this week. XLF puts netted 105%, and an XSP spread went from $1.10 to $4.29 the same day.

Today I went long gamma with an Iron Condor, buying it for $3.50 and selling for $7.00. Three out of four trades this week were profitable.

The bifurcations are only getting wider. Watch tonight’s breakdown to see exactly where I’m targeting next week.