Del's Nightly-ish Watchlist 🌙 3-25-21

Today initially threatened to be a big red day for the markets. We saw a relatively large sell off in overnight futures followed by a gap down morning across the board. (Watchlist for tonight at the bottom)

Despite the bearish tone and the VIX spiking with relative strength, SPY managed to reclaim the bottom-out and rally through lunch without being able to break the next major descending trend-line.

Watchlist Performance

Today's watchlist traded together in the morning and then diverged into themed breakouts later in the day. GME showed strength into and through the market dip, same with the rest of the meme names like AMC.

Despite the earnings expectations of GME, this once again goes to show that meme stocks due to their gamma profiles may be playing the role of a volatility asset class like VXX, UVXY by absorbing rotational IV like a vacuum. Let's not dive in there! But interesting to think GME, AMC + meme stocks could be an unofficial hedge on the market.

The relative daily range volume leaders in the space were GME TME IQ CAL, but despite their moves, as we can see below, the underlying implied volatility goes to the meme stonks.

High implied volatility can often anti-correlate the ticker to the underlying market during a market event day. And the implied volatility in a name is often spread across themes, not just a single name, AND likely to continue pushing IV into the coming days. I have a study on this relationship that I hope to share soon.

On to the watchlist.

Swing Watchlist

This watchlist is to be refined in the morning, as of tonight, these are areas and stocks of interest generated from my sheets and parameters.

This was my first watchlist post, hope you enjoyed it! I'll get the old BVP interviews up on here as well soon. In future posts I'll also post and review trades, but I just got this site set up and it's getting late. Enjoy and be prepared for more volatility until we break above 390 on the SPY.