Market Commentary for Wednesday, October 1, 2025, by Peter Cook
Asia last night was a bit of a blood bath, but Europe is buying the dip.
I don't trust this despite the setup being pretty good - I got long signals on the RTY last night but had to close up my trades with small gains after I saw the 0DTE Skew this morning.
We are in a crash setup - the last 2 times this happened we had -7% drawdowns within a week. Will it happen again? I have no idea. I just know enough to know that I stay far away if this kind of thing starts. The put buying on the Banks and insurance stocks is obscene right now. Someone dropped 34,000 Puts on the KBE (Bank ETF) yesterday and that thing rarely trades that kind of volume. For comparison there were 393 Calls purchased yesterday.
Typically, that kind of stuff resolves in a short squeeze / bullish. But this is that rare circumstance where they are paying so much, so fast for puts that it should give you pause. What do they know?
ADP Employment data is a disaster, and we are back to pricing in 5-6 cuts again. The local and state government DOGE stuff is hitting hard. And Argentina is back to performing poorly after Bessent jawboned the market higher for a few days - they are going to need a Bailout and it ain't going to be cheap.
The line in the sand is 6700 today on ES - under that and it's a no touch until we retest overnight lows, else it's probably fine (for today, not the rest of the week).
PLEASE BE CAREFUL THIS IS NOT A JOKE.
Levels:
All the best;
Peter Cook
#NQ_F Chatroom Chief Moderator
Hamzei Analytics, LLC
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This email went out to Members at 0931 ET on October 1st.
