Last week in my Market Drop post, I shared on the premium side how whales were buying millions of puts at a single level. I had filtered for options >$500k to see what big money was doing. The traders were aggressively buying millions out-of-the-money puts above ask on short-dated expirations at the $495p and $490p strikes. Just as they predicted, SPY closed at $495 on Friday.
Looking at the charts, SPY finished the week with a very bearish candle.
This sets up a move towards the $484 support, which is better observed on the daily chart below.
However, it does not seem that bulls are letting bears get their way that easily. Based on the option flow on Friday, traders were busy opening calls. This would nicely align with the fractal that I shared in mid-March which shows a bounce after falling around $500.
Posted on March 14 (timestamp on the upper left)
Updated today
Let’s review the option flow for the upcoming week.