Weekly OFR (Option Flow Report)

The OFR — Option Flow Report

By Chris Capre, Head of BOS / TW / 2ST

(Do not forward)

Welcome to a new trading week!

The Week in Review

SPY:

SPY had one of its strongest bullish weekly closes gaining over +3% on the week with most of the gains on Monday and Tuesday ripping +26pts over the two days. It mostly consolidated the rest of the week with mixed earnings from AMD and SNDK. All of this is happening against the backdrop of USO holding above 120 and 30yr yields having their longest streak above 5%.

QQQ:

QQQ’s mostly traded inline with SPY last week also ripping +42pts off the weekly lows with the gains parked on Monday and Tuesday. Mag7 + software are driving the tech gains as the AI trade is attracting more scrutiny due to capex issues and lack of returns on investment for AI.

• We begin this week with no major progress on the Iran/US conflict with the US running out of precision missiles, thus not able to go hard with strikes while Iran & Oman are working on their own deal to open the Strait of Hormuz. USO is back where it was last Monday after dipping to 114 (now 121.86 as of this writing) and climbing while Iran is saying the US has to concede to its conditions from the last MOU to open the Strait. Overall not much progress here but oil is climbing.

• While last week was the last major week of earnings, we still have some ‘mid’ level players with SMCI, CRWV, NBIS (lots of neoclouds) but no major players till the end of the month with NVDA the last week in Aug.

• With earnings mostly done and dusted, focus should shift to macro-economic events, with CPI (Weds) and PPI (Thurs) as inflation + jobs will start to come into focus since it will be driving rate hike probabilities for the Sep FOMC.

• The AI trade seems to be taking a pause with AMD and SNDK down from earnings so focus/rotation may shift into Mag7 + software to take the tech lead