Scott Burrill - Market Notes

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Market Note

Well into Act II

Dec 23, 2018

I wasn't planning on a Note, but market events have me pouring through data.

Make no mistake; last week was as memorable as any I recall in my 30+ year career. This is as bad as it gets on multiple underlying metrics.

After an asset flush, we must be alert for Credit Contagion and Liquidity problems (Act III). HYG and XLF come to mind as proxies.

In fact, making the rounds this Sunday afternoon is a press release from Treasury Secretary Mnuchin.

Last week, we smashed the implied move by 3-Sigma. This shortened week's option implied move is + / - 92 points, with + / - 50 points alone on tomorrow's shortened session. With Friday's SP500 Close of 2416, the lower edge is 2325 and the upper edge is 2508.

Logic dictates an oversold bounce with mapped Levels to the upside.

Recall though, if what is anticipated doesn't occur, then the opposite move is more reactionary. Trading below 2400 triggers aggressive Shorting; therefore, 2343.75 in the SP500 calls into consideration 2265.75 and 2187.50 intermediate term.

Merry Christmas,

Scott

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