Crude Oil Rocks… and 4 Other Thoughts on Today’s Market

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1) The Beast!

Crude oil is an absolute beast with 2 key catalysts pushing it: 1) Fed dovishness, which is pushing down the dollar and 2) hopes for an output freeze or cut at the September OPEC meeting.

It seems like everyone forgot that OPEC disappointed at the June meeting after a ton of anticipation that a policy change was in the wings.

But that's the nature of momentum.

And oh yeah — check out the nice, slow grind up in HYG. That is a good sign for the bulls.

2) Buh-Buh-Buh-Biotech

Biotech (IBB) is putting in a nice bounce off the lows this morning and outperforming by a solid margin.

As with HYG, this is a good sign for the bulls

And it's an area the bears need to break to get a real downside move.

3) Russell 2000

Same story as HYG/IBB.

4) Zee VIX!

Yesterday's intraday rally in SPX and today's rally up to break-even is sending the VIX down below 12 again.

This is bad news for me since I'm very much long volatility through VIX calls.

I admit I'm growing restless.

We haven't had a 1% down day since June 27, which seems crazy. This stretch is even more boring than the April-May snoozefest.

5) Twilio (TWLO)

The other day, I listed 3 reasons I would not short Twilio. That post received a lot of attention.

The stock has pulled back a bit, but it still looks like a pretty dangerous short.

Put option open interest has gone from 9,710 on Friday, August 5 to 34,394 yesterday.

Plus, on August, 5, call open interest was almost double the put open interest.

And as of yesterday, the put open interest exceeds the call side.

The stock is also Hard Borrow, has big short interest, and there is still a massive put skew.

Unless the broader markets really break down, I suspect Twilio shorts will get steamrolled.

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