Markets fell on Thursday, with the S&P dropping .46%, although off the lows of the day. Asia stocks rallied overnight while Europe indexes are in the green this morning with U.K. markets hitting all time highs. U.S. futures are pointing to a higher open, the Dollar is lower while Yields, Oil, and Gold are higher.
And here is my morning rant from yesterday: https://www.optionmillionaires.com/jb-pre-market-rant-april-25th-2024/
And my afternoon rant from yesterday if you missed it: https://www.optionmillionaires.com/jb-afternoon-rant-april-25th-2024/
It was a rough start to the session on Thursday, with stocks already set to open in the red after META"s weak guidance. The lower than expected GDP number then added to the morning losses. One would think the weaker data would add some fuel to the Fed's rate cut fire. Either way, markets sold off until the 10am hour, when they found buyers to close well off the lows. The Vix, which has been one of the better forward market indicators as of late, went from up 10% to down by the end of the day. This morning the much anticipated PCE data came in as expected and the lowest YoY number since 2021. Hopefully enough to buoy markets today although strong earnings by Google and MSFT after yesterday's close was likely enough anyway. That $504.50 handle is being broken this morning, hopefully that holds today and then the $512 support/resistance comes next:
Also, a nice read on Marketwatch this morning, a scenario that is not talked about too much. What happens if inflation starts to rise again AND the economy slows. We have been lucky to see the economy remain strong despite rising inflation and rising rates... just something to keep in the back of the mind:
“I think it is this stagflation question, that the economy starts to slow and inflation rises…I’m not worried about one data point, but nobody’s really prepared for that scenario, and that’s difficult to hedge,” Haefele said in a Friday interview with MarketWatch.
Can read it here: https://www.marketwatch.com/story/heres-the-scenario-that-nobodys-really-prepared-for-says-ubs-wealths-cio-16a0b938?mod=home-page
AVGO was reversing the lows right out of the gate yesterday morning and on high volume. Take a look at the chart:
I then went and added some spec calls on AVGO. Sure enough, the stock broke thru into the $1300s. I closed some of the calls 20 minutes later for over 100% and then closed the rest for over 100% 40 minutes later as the stock seemed to stall and volume slowed down. Certainly a name I will be watching again today for possible lottos if it shows strength at the open:
While I was watching AVGO, URI and POOL both fell to lows at 10am. I took my eyes off them for a bit only to look later and see them reversing losses to trade higher. I figured URI had the better earnings so went and added some URI spec calls. Sure enough the stock continued to bounce up into the $690s. I used the move to close some of the calls out for over 100% and held the rest into today. Think URI could trade north of $710 today - also got a PT raise from Stifel this morning to $750 from $710:
POOL looks good here as well. May look at some $400 and/or $410 calls if spreads tighten up:
RILY opened at $28.49 yesterday, tested lows at 10am, then embarked on a rally, testing $35 near the close before finishing at $34.69 - it was up 16.6% on the day. I was able to close some of my calls out for 100% and held some into today. That $35 spot looks like a key area... if that breaks, think $38+ can come today. Like I mentioned on yesterday's rant, maybe it keeps squeezing but I will be done with RILY after today. The story is not at all like GME. At the same time, hope any continued squeeze in RILY will bode well for TRUP, which reports earnings next Thursday:
And TRUP:
A solid day for VKTX, closing up over 5% You can finally see the daily candle on the VKTX chart!:
Really want to see it over $70 into the weekend. Nice clip here where the CEO of Roche speaks highly of VKTX:
https://x.com/Pharmdca/status/1783487051746431468
M&A soon? Hopefully.
AI reversed morning red to close nearly flat and is gapping higher this morning on the heels of MSFT and GOOGL's earnings. If it holds $22.50 I may start looking for later dated strikes for that eventual move to $27+:
Not much to add on CGC and ACB here, both are green on the week. Hoping for some continuation today:
ACB:
And lastly, still looking to reenter AVAV. Will be patient:
And here is what I am watching today: AVGO, LRCX, POOL, URI, AVAV, GWW, VKTX, AI, TRUP, SE, CDLX, DELL, CAVA, MDB, IIPR, NOW, TZA, ,SPOT, EW, TERN, SNOW, LRCX, GPCR, PYPL, and V.
Let's have a great day!
-JB