Hi traders,
This week started like a breakout and ended like a breakdown. Chips ripped Monday through Wednesday, Big Tech earnings flipped the tape, and Friday was the S&P 500’s worst day since June. At the same time, someone was quietly buying January puts on QQQ in size. Let’s get into it.
The QQQ Put Surge: Reading the Scanner
Friday was an ugly day. SPX flushed -1.8% to 7,580.07, the worst day since June and the third straight losing week. QQQ -3.5% Friday. Nasdaq -5.2% in October, its worst month since March 2025, 7.8% off the high. Most indexes had unusual put flow.
We’re not surprised. We expected correction into the Midterm election that’s in about 48 hours.
TMAD flagged a QQQ Put Surge, GEX Z 5.03. That’s extremely unusual put gamma activity.
Layer 1: 0DTE churn (the noise). The Leading Contracts by GEX Change were all Oct 30 0DTE:
Layer 2: real allocation (the signal). On the OI change tab, one cell lights up the whole grid: the 650 put, Jan 15 (77 DTE): +30,935 contracts. That’s new open interest, about 9% below spot and dated past the election and January. It’s a big hedge, not a day trade.
Other notable OI changes:
695P Dec 31: +7,820
700P Jan 15: +2,111
670P Dec 18: +2,023; 550P Dec 18: +1,805; 620P Dec 18: +1,515
650P Dec 18: -1,137, which may be a roll out to Jan 15 650s.
See TMAD.app.
AI Capex got Repriced
GOOGL 0.00%↑ -12% on a miss with negative free cash flow,
INTC 0.00%↑ -28%, and AMZN 0.00%↑ missed.
MSFT 0.00%↑ held up best, with Azure +48% - we wrote very detailed breakdown on MSFT a couple of months ago and we’re still long. Good choice!
Fed on hold, hikes in play: split hold under Warsh, Q3 GDP +3.4%, PCE 3.6%. About 75% odds of a December hike.
Iran: Talks vs. Post-Election Strike Risk
Qatar held 12+ hours of talks in Tehran. Araghchi says a new proposal would reopen Hormuz in 2 days.
US officials warned allies of possible renewed strikes after Nov 3. Khamenei vows an “unrestricted response”.
Brent $117.64 and WTI $104.12, 6-month highs. Hormuz traffic is 70% below pre-war.
WTI and USO both look like they’re about to breakout. $100+ oil keeps inflation and a December hike alive, and that pressures tech. We wrote you a roadmap if oil remains high. Please re-read here:
Just below $170 resistance on TMAD app. Target $175-$180.
ITA +3.7% on the week. We allocated some money into LMT 0.00%↑ last week, we updated our long term portfolio in our last week’s TMAD weekly. We also added KO 0.00%↑ that name keeps looking good on scanner.
Possible breakout play ok KO is here. (Just bare in mind, it’s a slow mover and more a divwersification and rotation play than a short term trade).
The Midterms: What the Odds Say
Election Day is Tuesday, Nov 3. Odds as of Nov 1:
A Democratic sweep of Congress is priced at about 70% on Kalshi, a record and up more than 9 points in a month. A split Congress (Democratic House, Republican Senate) is about 27%. A Republican sweep is about 6%.
Nate Silver’s average has Democrats ahead by 9.1 points, 52.4% to 43.3%. The six averages Election Lab tracks come out to D +8.6.
What if Democrats win both chambers?
With a Republican in the White House, a Democratic Congress means divided government, or gridlock. History says stocks tend to rally once the result is known and volatility comes out.
VIX Term Structure: Where It Stands Now
Backwardation means short-dated volatility is priced above longer-dated volatility (VIX > VIX3M). It’s the market paying up for protection now, and it’s a near-term stress signal.
Friday’s closes:
VIX9D VIX VIX3M VIX6M
19.25 19.42 20.78 22.20
As of Friday, the curve was still in contango, not yet backwardation (VIX/VIX3M 0.93). But VIX9D jumped from 15.87 to 19.25 in one day and is almost level with the VIX. A flip is the tell to watch this week.
Why it matters: dealers who are short puts are in negative gamma. As the market falls, they have to sell to stay delta-hedged, and that adds fuel to the drop. Backwardation warns this environment is building. Friday’s QQQ flush on heavy 0DTE put volume is what it looks like.
Layer 3: election-week hedges. The Nov 6 column (the Friday after the vote) shows +950 to +2,224 at nearly every strike from 585 to 715. The biggest is the 715P Nov 6 at +2,224. That’s a wide spread of hedges sized for election-week event risk.
How to trade it: 650 to 670 is where the heavy downside positioning sits. If we get there, those puts can act as support as hedgers take profits. Until then, 690 to 695 is the zone to reclaim. Below 690, the negative-gamma story stays in charge.
GOOGL & AMZN: Where’s the Buy Zone?
Everyone’s asking if the earnings flush is the dip to buy. Here’s what the chart and the TMAD flow say.
GOOGL - Stage 4 breakdown. It’s -31.4% off the May 18 high of $408.10. RSI is 21.4, deeply oversold. Falling knife until it bases. Risk to reward not there yet. I’m going to wait for lower prices.
AMZN: $240.35. Stage 3, rolling over.
It’s -16.3% off the Aug 3 high of $287.20. RSI is 38.3. Support ladder: first support is $240 (the put wall). Better risk/reward: a hold of $225-230 or a reclaim of $250. Invalidation: a close below $225.
AMZN is closer, and a reclaim of $250 would put it back over the call wall.
How to Find This on TMAD
Open the Put Surge view for a ticker. The header shows price, “Put activity by strike and expiration,” and the GEX Z score.
Check Leading Contracts by GEX Change at the top. Each row shows strike, expiration, DTE, volume, OI change and GEX change. Rising OI means a real position. Falling OI on big volume means churn.
Switch between the four tabs: GEX share, GEX change, Volume, OI change. For allocation, go straight to OI change.
Read the grid: strikes run down, expirations run across. Use the arrows to page through expirations (for example “5-8 of 32” and “17-20 of 32”).
Use the heat scale: darker means a larger change, red cells mark decreases, and “-” means no data. Every contract is listed below the grid.
See the flow before the move. Put Surge, GEX heatmaps, FEAR & FOMO search, and AI connections are all live at tmad.app.
Trade Ideas
Not many to be honest, I’d rather wait this week. You saw how fast the course changed last week. Daytrading is fine. We do it in the discord and it’s fast paced.
We will send a full updated of trades no Wednesday after Midterm,
Good luck to the USA.
— Lia