Last week the SPY traded 269M shares. It was a 4-day week, so even accounting for that, multiply times 1.25 and you still get about 336M shares. 336M shares is less than the prior week of Feb 12th, which had 375M shares. You can see below that the SPY traded with one of the lowest weekly volume totals so far this year, even when we had NVDA earnings, and the market exploded to all-time highs. Only the Week of Feb 2nd this year had less volume since 1/1/24.

Week of Volume in SPY:

1/1/24     397M shares

1/8/24     344M shares

1/15/24   357M shares

1/22/24   357M shares

1/29/24   437M shares

2/5/24     318M shares

2/12/24   375M shares

2/19/24   269M shares (336M shares if 5 days)

We get PCE, the Fed's preferred inflation gauge, on Thursday morning. Expectations are for a hot number with the M/M projections for headline and core to come in at 0.4% higher for January, vs 0.2% higher for the prior month.

Our SPY options trade has a lot of time left. The SPY is currently up slightly on the session at $508.10. We are looking for the SPY to close Friday below $511 for a maximum profit. Our max loss is if the SPY closes above $514. Our breakeven is about $511.90. We are risking $2.10 for $0.90 of profit with this trade.

This morning that option trade is currently at about an $0.85 credit, just below where we placed it. There will remain some volatility premium in this trade ahead of Thursday's inflation data. We also get 4th quarter GDP on Wednesday, along with some Fed speak this week.

We still have equities out with their numbers this week including Macy's on Tuesday, PARA and CRM out Wednesday, along with many others.

I imagine the bar is going to be pretty high for this market to find a way to spike higher, yet a consolidation is not out of the question.

The 10 year looks to have bounced off the lows of Friday. The 10 year yield currently sits at 4.28%. The Yen looks like it is bumping up against resistance near the 151 area, as the Dollar looks to have rolled over to lower prices yet again.

The VIX looks to be making a series of higher highs and higher lows, even as the market has pushed new highs almost on a weekly basis.

This may be the start of lower rates and a weaker dollar coming back at us. We will see if we get further consolidation or if things begin to heat up. Thursday's inflation data could provide some fuel in either direction.

Stay tuned for updates! 

Equity trades:

Long 1/2 position in DIS at $98.75. Disney is trading at $108.46. We will look to add to this position in the future. 

Options Trades:

We sold a $511 - $514 SPY March 1st credit call spread for $0.90. It is currently trading at $0.85. We want this to go to $0 for a maximum profit, as we already collected the premium and want it to expire worthless. This trade expires Friday. 

 

 

 

 

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