Inside What is Driving This Weird Market | The OPEX Effect Ep. 10
The OPEX EffectJuly 16, 202401:15:11

Inside What is Driving This Weird Market | The OPEX Effect Ep. 10

In this episode of the OPEX Effect, we explore the current market rally and discuss the concept of "correlation spasms" - unusual movements and relationships between market components. We examine record low volatility, the outsize impact of mega-cap tech stocks, and the recent surge in small-caps. We analyze the prevalence of zero days-to-expiry options trading and its effects on intraday volatility. We consider potential scenarios for how current market imbalances may unwind and highlight key indicators to watch around the upcoming options expiration. Our goal is to provide insight into the complex forces driving markets, helping long-term investors better understand and contextualize daily market moves, even if they don't actively trade based on these shorter-term dynamics.

0:00 - Introduction and current market rally discussion
5:00 - Explaining the OPEX cycle and its importance
10:30 - Review of previous episodes key points
15:45 - Analysis of record low volatility and correlation
22:00 - Impact of mega-cap tech stocks on index performance
29:15 - Recent surge in small-cap stocks and market breadth
36:30 - Zero days-to-expiry (0DTE) options trading effects
43:00 - Historical comparisons of market concentration
50:15 - Potential scenarios for market normalization
57:30 - Key levels and indicators for July OPEX
1:04:00 - Discussion on market liquidity and fragility
1:10:30 - Conclusion and implications for long-term investors

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