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Options Volume, Bearish

The CBOE's Put/Call ratio ended at 1.33, extremely bearish that in normal times you would consider to be a contrarian indicator.  Today, however, the "smart guys" are not so smart and remain mostly uncertain as to direction.  The best advice, however, would be to play with the trend and sentiment.

The SPY recorded extreme option activity at the October 100 and 103 strikes with well over 200K contracts on both strikes, suggesting a spread trade that looks to be a Bear Put spread. The expectation with this trade is that values will move below 103 to the 100 by Octobers expiration.  Putting the October action aside, Put's to Call's on the SPY remains extremely bearish with significant Put activity in the Weekly and September options.

With no major economic fixed event scheduled tomorrow, expect that markets to follow sentiment and momentum.   The overall trend is likely to continue ranging until more fundamental data is released to help the market determine if a direction is warranted.




Disclosure: No positions