1/xToday’s market action was generally constructive as WE GOT THE CORRECTION IN TIME WE PREDICTED... That said, we continued to have a nasty rotation beneath the surface, which has kept us cautious. The dramatic NDX weakness, in the face of improving economic fundamentals is https://twitter.com/jam_croissant/status/1326020701132902401

2/x concerning in that it continues to signal that the duration trade will not likely respond well to a strong economic recovery paired w/fiscal policy & higher LT rates, & it does not appear that value is strong enough to support this market given the multiples at play & size of

3/x the growth complex. On the bright side, fear is creeping back intro the market and retail call buying was substituted for considerably more put buying for the 1st time in a while...Maybe most importantly though was the continued SPX vol compression. As I reiterated yesterday,

4/x UNPINNING THIS MARKET WILL NOT BE EASY, as the SPX has been well oversupplied.. & As laid out, the AM price action was an early & important tell & sign to buy the morning dip for mean reversion... the same will hold tomorrow morning. Given the cross currents, we’re still

5/x watching for clear confirmation to look for long delta entry & continue to think the better trade is short near dated Ivol through 11/16-18 morning & SCALPING FOR MEAN REVERSION IN EITHER DIRECTION. Time is still on the side of the bulls, as OpEx cycle driven vol compression

6/x & Vanna/Charm flows into 11/18th VIX expiry & improving seasonality, as well as the potential resolution of election uncertainty could provide fuel to significantly improving seasonality around the coming holidays & the Jan effect...look for healthier relative NDX performance

7/x & rates normalization as signs to continue to add long exposure...Given that Ivols are now lower & there is seemingly a shoe to drop on the election front with the sacking of 3 out of 4 of the top brass @ the Pentagon, play everything w/ a close foot by the exit, until we get

8/8 more clarity into what Trump has planned... Good Luck!