Monthly $2.7Tn Options Expiration
Home Sales Abysmal
Ok guys today we have the February monthly options expiration and momentum in equities is waning! We have warned that the insiders and big institutions have stealth-fully been exiting the MEGA8s and that the Nasdaq Index itself, well hasn’t really gone anywhere in months.
As we told our subscribers in a prior letter when equities stagnate for this long they are absorbing massive amounts of buying to exit very large positions, this is why overall the indexes don’t move. The overall general equity index trend is up because millions of laborers and investors make consistent allocations and only exit if job losses increase, causing large unemployment claims which lead to liquidations, which lead to a general slow down in the economy and then ultimately equities get revalued to absorb this new trend data.
Its been a few years since we have seen this type of action, but everything moves in cycles. We posted our Subscriber only note yesterday with the MEGA8s Market Cap chart, we will show it again here, the red line of death is below:
The MEGA8s are at the same value collectively as they were on Dec 2nd, 11 straight weeks going nowhere:
As far as the big options markets go, the SPX big handles are defining the range here now that 6100 has been broken thru to the downside, honestly 6100 is probably the magnet strike price here, but downward momentum could squeeze things by the end of the day to the 6050 Strike, however the 21VWMA is 6071 adding support here but we don’t put much stock in that as momentum pressure seems to be building for a downside move here:
When we look at the QQQs ETF, big open interest on the 530 Strike with the puts having 31.2k and the calls 26.6k, so this could provide a decent option magnet level here this afternoon, but the rejection once again form the 540 area is not good for the bulls here and the weekly close near 530 if this area holds puts a sour tone on the start to next week:
Just a quick update on our earnings play this week Carvana (CVNA), which is now trading $230 -$55.15 for the week or -19.33%. The $260/$240 put spread we highlighted pre earnings is trading near full value of $20, so the 4x plus payoff potential was there:
Ok for you short term Emini Traders, 6091 in the futures was our key this morning and it held once, but the rejection just above 6100 proved too much, once it broke, the flood of stops and selling ensued. We would not be long this here but rather be patient sellers up near the 6100 strike again. However we would not be selling in the hole either:
The futures markets have the 6080 strike in options showing decent open interest for the puts there, perhaps this will give buyers some stamina short term for now, will see!
Ok we also saw Flash US PMI Composite Output Index print 50.4 a 17-month low and Flash US Services PMI Business Activity Index print 49.7 a 25-month low both well below expectation. The bigger news for us was the Home Sales data and when you look at this next chart from MishTalk it really puts things into perspective on how bad things are:
When accounting for population growth, existing home sales have declined by 32.6% from 1978 to February 2025, as measured by per capita home sales. This metric highlights the significant drop in housing market activity relative to the growing population. Sorry we can blame interest rates all we want, but there is a structural, almost societal imbalance here that is also at play. We haven’t seen this reflected in pricing just yet, but we have to imagine, that at some point here we will!
Ok guys, we expect volatility to rise here this afternoon as options players take their shots! So good luck, keep your head on a swivel and keep your wits about you. Oh yea, if you are not subscribed, please do so, the value you obtain vs what it costs, well lets just say, we are grossly underpriced! If you cannot subscribe for whatever reasons, we get it, but honestly we believe you are doing yourself a disservice, if its one thing we understand about this realm, its you get out what you put in! So at the very least, gives a like or share our work with others, this goes a long way to increasing our follower base and increasing everyone’s access to knowledge.
Till next time, have a great weekend, get out of your comfort zone, do something different and or go support a cause. Nothing gives humans more satisfaction and grace, then supporting causes you believe in. Don’t be limited by your own excuses, there’s always a plethora of reasons to say NO, find one good reason to say YES, it will change your life!
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