Premarket Report for Wednesday, January 29, 2020

Options Activity:  A lot of dollar gamma in calls at 3250 and 3300 overhead resistance.  At the close, Tuesday, it was business as usual – selling OTM calls and buying deep OTM puts.  Aggregate GEX is up 154% over its low, yesterday.

Valuations:  Calls remain underpriced and OTM puts continue to get a bid.  Dark pools remain buyers.

Volatility:  Contango..

Auction Market Process:  Currently in balance and trading at fairest value (volume point-of-control).

Macro:  Travel, luxury and mining sectors hit by worry over the impact of coronavirus on the global economy. 

Calendar:  FOMC will have the market focus with the committee’s comments regarding its rate cuts and T-bill purchases. Pending home sales at 10 AM, a marker for momentum. Earnings of note:  MSFT, FB, PYPL, and BA.  World Health Organization announcement at 1:00 PM.

Taken Together

All three vulnerabilities resolved – for the time being.  Rates and $SPX rose and $AAPL beat with strong guidance.  By Market Profile, the market is currently at fairest price.  More events this week to contribute volatility but a more bullish near-term outlook appears reasonable.