Alright, in all seriousness, there's been a fair amount of rumors surrounding Binance's solvency this week. This narrative originated from Binance's ambiguous proof-of-reserves and internal audits.
Following these questions, Binance saw a net outflow of $1.3B over the last few days, with many prominent trading firms withdrawing nine-figure amounts.
And Binance's public image has been under fire, with the company's official Twitter account leaking a private chat log featuring a crypto trader with over 280,000 followers.
It appears you are still confused in regard to the reason your account was put into withdrawal-only mode. @CoinMamba, here is a screenshot of your conversation with our CS agent. pic.twitter.com/Na2MagN6Dy
The infamous Santa Claus rally is just around the corner.
And contrary to popular belief, it doesn't start until the end of next week.
The official period for the Santa Claus rally includes the last 5 trading days of the year and the first two of the following year.
Based on the 2022/2023 holiday schedule, that means this year's Santa Claus Rally begins on Friday December 23th and goes through Wednesday January 4th.
These 7 days have historically had a ridiculous track record, averaging over a 1.3% return for the S&P500 and coming in positive almost 80% of the time.
Since 1950, all other 7-day periods throughout the year only average 0.24% returns and were positive less than 60% of the time.
Welcome back to Under the Hood, where we'll cover all the action for the week ended December 9, 2022. This report is published bi-weekly and rotated with The Minor Leaguers.
What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We use a variety of sources to generate the list of most popular names.
There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.
From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts
This is one of our favorite bottom-up scans: Follow the Flow.
In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish, but not both.
We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients.
Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.
In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Running Out of Gas
After failing to hold a breakout to new all-time highs earlier this year, gasoline futures have fallen by roughly 50% in the past six months. Last week, both crude oil and gasoline continued their slide by taking out their 2018 highs. As long as energy futures are below these prior-cycle highs, we want to approach the entire sector with caution.
Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.
By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.
Let's jump right into it with some of the major takeaways from this week's report:
* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.
The S&P 500 fell 3.4% last week, the 11th time this year that the index was down 3% (or more) in a single week. Only 2008 and 1974 had a larger number of such declines. Paired with the 9 times the S&P 500 has rallied 3% or more in a single week this year, 2022 has now moved ahead of 2009 and is only in third place (still behind 2008 and 1974) with 20 weekly swings of 3% or more in either direction.
We've currently only got one delta-neutral "income" trade on the books right now, but that one will be coming off sometime this week as it is comprised of December options which expire this Friday.
In a perfect world, I always prefer to have a least some delta-neutral short premium exposure in the portfolio to help us compensate for any sideways chop that the markets might serve up to our existing directional bets. It's a a nice portfolio diversifier.
With this in mind, today's trade will be in an ETF that is currently trading smack-dab in the middle of a four month range that I expect will hold for a least a few more weeks.
