Markets soared on Wednesday, with the S&P adding 2.5%, its 3rd best day since May of last year. Asia stocks closed lower overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a .37 lower open as I write this, the Dollar and Oil are higher while Yields and Gold are lower.
And here is the last rant if you missed: https://www.optionmillionaires.com/afternoon-rant-4-8-26/
Stock gapped substantially higher at the open yesterday and never looked back, with the S&P, Nasdaq, and Dow all rallying over 2.5% and enjoying their best session since last May. Stock did find some selling at 11am and in the afternoon, but buyers were quick to step in. Also of note the trading range for the day was .84%... pretty small relative to the 2%+ gap and compared to previous sessions this month.
Who knows if the cease fire sticks but the media sure makes it out like it won't... I guess to keep folks watching. So expect more headlines as the cease fire deal gets worked out into and during the weekend. With eyes off Oil and the middle-east, markets went back to selling software names with INTU, CRM, ADBE and others taking it on the chin. Hopefully we are in the late stages of that and some of these oversold names can finally show some life... especially the ones that don't belong like RDDT and RBLX.
My annotation on my charts sometimes work... That $677 level looks like key support/resistance. Unfortunately not much under that, though the 200dma at $660 could provide some support:
I waited for the opening dust to settle yesterday then re-entered GLW calls. It started to break over $160 and my calls were up over 50%, but then it reversed course. Considering it is so far out of the money the premiums will come out fast so I closed the calls out for a small gain. GLW bottomed right before noon at $157 and then melted higher for the rest of the day to close at $165 and of course is gapping higher this morning at $167. Still think $248 is coming, so with that premise, may look to add some far out-of-the money strikes again:
Then in the afternoon, with software names coming under pressure, I went and added some lotto APP puts. The stock had tumbled $100+ on the last failure to break the 50dma so figured there is decent odds for a bigger pull this time if the stock fails to find footing. Sure enough the stock broke $400 on volume. I then used the move to close some of the puts out for 100% and then more for 150%. Will be a key morning. If the stock fails to reclaim $400 think more selling comes. If not, will look to close the puts and possibly revisit:
Like most mornings I was eyeing RBLX and RDDT for calls yesterday. Both had solid gaps with RDDT opening up nearly 10%. Both turned into great sell opportunities... almost like bears were waiting for an open like yesterday. Think more signs that the stocks are not ready yet for reversals. Unlike RBLX, which reversed gains to close down over 3%, RDDT closed higher. Something of note and maybe closer to breaking out:
Was also watching HIMS and FUBO. They also reversed morning gains. Likely taking those off my main watchlist for now. Same with TTD and U. Not saying I won't add when I see an opportunity, just won't be wasting as much time watching.
If the market finds footing at the open will have my eyes on AVGO and ANET for some possible call lottos. If software names show signs of selling again, may look to add INTU, ADBE, and/or WDAY lotto puts to go with the last of my APP puts.
And here is what I am watching today: ANET, AVGO, INTU, ADBE, APP, KODK, GLW, RDDT, RBLX, WING, GLW, U, RDDT, LRCX , ASML,ORCL, U, TTD, GLW, AAOI, TSLA, ALMU, VKTX, RH, ROKU, RBLX, SEDG, KODK, NKLR, SEDG, AAOI, DUOL, GLW, ALGN, ISRG, LMND, CF, NTR, IPI. SERV, SHOP, ANET, HTFL, ROKU, POOL. V, MA, ZM, WING, SHOP, SQQQ, MRNA, DUST, FLWS, COCO, COIN, KODK, and SQQQ.
Let's have a great day!
-JB