Scott Burrill - Market Notes

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Levels for Thursday

Levels for Thursday

Nov 28, 2018

Fed Chair Powell did not disappoint as a catalyst sending the SP500 Index parabolic, well above the outer edges of our pre-computed Levels and the weekly option implied move.

In fact, today's move nearly eclipsed the + / - 62 points for the week. This year, 25% of trading days have seen hi-lo ranges in excess of 45 points. This is a far different trading regime now than the low volatility environment of 2017.

Breadth was solid across the board and we await follow-through tomorrow, fully anticipating significant resistance at the 2754 Level. Remember, if what we anticipate fails to occur, then the opposite move is often more reactionary.

Potential catalysts remain in the form of Tariff-Tweets, Fedspeak and the FOMC Minutes.

Some solid performance numbers were put up in the most actively trading names; although, tepid Facebook (FB) had neutral informed buying and relative index underperformance (negative alpha).

Blocks dominated in the TMT Group apart from ETFs.

2695 seems far off, but it represents the upper edge of the option implied move. Rarely have we closed outside of those boundaries this year. It merely means historical volatility is greater than being priced by the marketplace right now. With billions of dollars traded in these markets, I look to them for their risk-pricing and efficiency, particularly in the SPX. A failure to pierce 2754 certainly puts 2700 in play.

Clearly, it remains a great trading regime, pinging Level-to-Level.

All the best,

Scott

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