Markets fell again on Wednesday, with the S&P losing .58% and closing lower for the 4th session in a row. Asia markets closed mostly higher overnight while Europe indexes are also in the green this morning. U.S. futures are pointing to a higher open as I write this, the Dollar and Oil are lower while Yields and Gold are higher.
And here is my rant from yesterday if you missed : https://www.optionmillionaires.com/jb-afternoon-rant-april-17th-2024/
It was another tough session for stocks on Wednesday. For the third session in a row the S&P opened higher, only to reverse those gains and close in the red. Nice little stat here on how many times that has happened(it is not often):
https://x.com/RyanDetrick/status/1780703917736919500
The S&P has now closed lower for 4 straight sessions, something it has not done since the end of last year into this year. And 70% of the S&P is now under its 50dma(last time that happened was November):
NFLX earnings after the close today could certainly kick-start the market. There were also reports out this morning that if there is a retaliatory attack from Israel on Iran, it would be after passover... so if the report is correct, that gives until at least April 30th for things to get figured out. Some certainty to the uncertainty could bode well for markets. I feel like we need some type of flush and intra-day reversal. Not sure it happens today but that is when I think the bottom is in or close. The SPY closed right at the $500 handle yesterday. Fear that $487 handle is next if markets can't muster a rally back over $504.50:
And still keeping a close watch on the USD, Yields, and Oil.
And lastly, the VIX has broke out of its nearly 18 month downtrend. Every time the RSI gets near 70 it has reversed. Could be another one of the signs we are close:
With markets reversing course in the afternoon, and ASML selling off after a dismal earnings report, I went and added some more hedge puts, this time in AVGO. The stock fell further after my entry and the puts were up nearly 100% at the close. AVGO broke under its 50dma and figured a move to at least $1250 could be in store. TSM reported earnings this morning that bested estimates, but just like ASML, sounded a but cautious on Phones and other items outside the AI space. I don't need AVGO to go in-the-money for my puts to pay nice but they will erode quick on any bounce. If AVGO starts to break $1300 I may look to close the position and revisit depending on the premiums, but do think it will offer a nice hedge if markets fall again today:
I also added some spec NFLX puts yesterday. I plan to lock most/all in before the close depending on if I can lock some in for profits to cover costs and ride the rest free. If they post strong sub numbers, 2-3 mil adds or so, stock should rally. A sub miss, under 1.8 mil, and the stock maybe pressured:
CRWD continues to melt lower. Have the puts into next week so will just likely continue to hold as a hedge and look to lock some in at 100% to cover costs when I get the chance:
MDB closed off over 2%. yesterday. Will need a big move today and tomorrow for my puts to pay. Still think $320 and below is possible in short order:
DELL is still holding the uptrend, albeit barely. Hoping it can break and close into the $120s today. Keep saying on the rant, one of these sessions will kick off another multi-day 10-15% rally just like the start of April:
CAVA came down to test $60 before bouncing... Hopefully can hold that 50dma again today and start its move back into the mid-highs $60s:
LLY announced yesterday that their tirzepatide drug reduced the severity of sleep apnea by over 60% in patients. Just shows how big the TAM is for GLP-1 drugs. Weight-loss, Diabetes, Cardiovascular events, Sleep Apnea, Fatty liver, ... what is next, addiction? I think so. Either way, this leads me to VKTX, like it always does. My strikes expire tomorrow so will be looking to add some later strikes before the close tomorrow. Mind-boggling it still trades down here and shocked it was red yesterday:
Still eyeing CDLX calls as well with April expiry tomorrow:
And today maybe another day where I sit on my hands outside of locking positions in if the opportunities present themselves.
And this is what I am watching today: VKTX, CDLX, AVAV, SE, CAVA, NFLX, IIPR, DELL, AVGO, MDB, ISRG, NOW, TZA, ,SPOT, EW, TERN, SNOW, LRCX, GPCR, NFLX, PYPL, RDDT, IWM, and ADBE.
Let's have a great day!
-JB