Markets closed mostly lower for the second session in a row on Wednesday, with the S&P losing .38% despite strong earnings from MSFT and GOOGL. Asia markets closed mostly higher overnight while Europe indexes are in the green this morning. U.S. futures are pointing to a higher open, the Dollar is lower while Yields, Oil, and. Gold are higher.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-247/
It was another tough session on Wednesday, with stocks hitting highs at the noon hour, only to slowly melt for the rest of the day to close at lows despite continued strong earnings reports. The type of action that kills premiums. Have my eyes on quite a few names but tough to pull the trigger in this environment. Hopefully today markets can hold their ground. This morning the first read on 1Q GDP came in at 1.1%, well below expectations of 2%. Quite honestly don't think this is a surprise and may add some fuel to the argument that the Fed should pause rate hikes at next weeks meeting. Would have really liked to see a close back above $410 on the SPY this week. Will need a strong rally and continuation for that to happen. The 50dma looms at $401.70, so will be the next stop to watch if things continue to melt lower:
VKTX announced earnings after the close yesterday. The earnings are not important, though you will see headlines that just mention a miss on EPS. The important part of an early stage bio is their pipeline updates and cash position. Both skewed positive with plenty of catalysts on the horizon in 2023. NASH data is still due out before Q2 is over and will be the next important piece of news. HC Wainwright upgraded their PT on VKTX to $35 this morning from $21. Think this trades into the low $20s today and mid-$20s next week. Will be looking to add more later dated strikes at some point:
The SAGE bull-flag is still playing out. The stock held its ground again yesterday despite the market weakness. Think once it breaks $48 the $50s come quick:
RARE is another Bio I have been watching lately. Cantor Fitzgerald came out yesterday with a buy rating and $114 PT. Think this can trade up and above $50 in the coming days so may look to add some calls today:
CMG soared higher yesterday after posting a monster beat and raise. These casual dining stocks will likely all benefit as inflation recedes and they can keep their higher menu prices:
https://twitter.com/omillionaires/status/1651234499043229700?s=61&t=64dvaFlqPie_Hhw6eZd-SA
WING reports next week, may look to add some calls for premium build into earnings. The calls are pricey so would look to lock most/all in before the close Tuesday:
WW put an end to its 4 session losing streak yesterday. If it breaks into the $8s today I may look for some further out strikes. They report earnings a week from today:
I am not going to make a trade just to make a trade, which is why I have not done much this week. Hopefully find some better risk/reward setups today.
And this is what I am watching today: WING, WW, RARE, SAGE, VKTX, CMG, SHW, ABBV, GLD, ALGN, SAM, EDIT, MASI, BLK, SITE, SMG, FAZ, EXAS, ULTA, YOU, SRS, BLK, SQ, SAGE, ICPT, U, TRIP, and AYX.
Let's have a great day!
-JB