Stocks Fall on Hot Economic Data, More to Come?

I’ve been saying we were likely to get a bounce that reverses since last week and Friday/Monday we got the bounce and today we got the reversal. Based on SPY open interest alone, there is a chance by Jan OPEX we see $600-605 (gamma squeeze) or a chance we stay in the $570-590 negative gamma zone where market makers trade with the trend. $595 would be equilibrium where the most option holders lose money.

The QQQs had a DeMark 13 today and are somewhat oversold, but not completely oversold based on the Alignment Indicator. $500 is a major OI level for the QQQs and likely support if price gets that ugly. The Demark 13 indicator aims to identify potential trend reversals in the market while maximum Alignment oscillator readings demonstrate overbought and oversold synchronicity and are often associated with price exhaustion.

Now, let’s check out the option models to see what they are saying.