Thursday price action and flow were similar to Wednesday, early morning selling with smaller momentum PUT sweeping, but bearish activity dried up as the market bottomed into lunchtime. Sweepers still found a good amount of stuff to buy throughout the rest session.

On the sentiment front

Short-term sentiment continues to cool as a little volatility has entered the picture, the fear of rising rates has rinsed off some much-needed bull froth in many spots of the market. Not much of a dent on intermediate timeframes as the AAII sentiment showed more bulls last week but should cool off a bit on next week's update. 

To swing or not to swing

That's the popular question currently, one important thing we noticed immediately last morning is there were way too many players moaning and groaning about how much money they were down off a little during yesterday's early morning selling. Then markets rebounded into the afternoon, so they got lucky but could you imagine if we actually had a down day or two? 

So last morning was a wake-up call, if you were uncomfortable with how much you were down last morning, then you have way too much risk on. This is no sweet spot, we are not doing cartwheels over any set up out there currently for swing trade or building positions. Now some names have started to breathe a bit but they've been running rampant for months! There's one thing we need to worry about is our own risk, we are not playing against a clock that will run out of time. We don't have to trade for any other reason than we feel confident our bet will make some money. From what we see at this moment, the only quality opportunity is intraday setups, playing off the greed of most traders out there who have been spoiled and aren't content with just making a profit anymore, they are looking to strike it rich on 1 stock. 

So aggressive sweeper activity is creating some strong momentum over the extreme short-term. That's what we want to take advantage of. 

Most players have seen SPACs "to da moon", penny stocks running from pennies to $5-10 in days and weeks. They are ignoring smaller profits to try to cash lotto tickets. That's all fine but when the market big boys pull the wrong for just your casual pullback, these traders are going to break. All the money they made over the past several weeks will be gone as quickly as you see the GAMESTOP!

So please smarten up out there, understand that whatever money wrapped up in calls you are currently holding for swing, can be lost. If you aren't happy with losing that amount, the de-risk or put on some protection. 

Notable bettings toward broader market indices ETF on 2/18

Market-wide option volume of 39.0m contracts was 11% below recent average levels, with calls leading puts 17 to 10. 

Individuals breakdown by sectors (2/18 notable bets)

Most active sectors included Utilities, Financials and Consumer Non-Cyclicals while Health Care and Consumer Cyclicals were relatively light. Of the 3,792 stocks with listed options, 935 (25%) closed higher, and 2,787 (73%) lower. Among the 500 most liquid single stocks, 30day implied volatility was lower for 333 and higher for 118. Unusual total option volume was observed in $Churchill Capital Corp IV(CCIV.US)$, $Riot Blockchain Inc(RIOT.US)$, $Walmart Inc(WMT.US)$, $QuantumScape Corp(QS.US)$ and $SOS Ltd(SOS.US)$.

Tech

Industrial

Consumer Cyclical

Financial

Communication Services

Healthcare

Energy

Real Estate

Basic materials

Consumer Defensive

Utilities