Friday Friday Friday Friday...
It's finally here. Welcome to Friday August 14th. Overnight stock futures were doing their thing, trading in a tight range just a stones throw from record highs... when boom... Europe opened and the $SPY dropped from near $338 to $335 in minutes.
The main excuse I could find was more Corona Virus based travel bans. I think the market has already told us travel doesn't matter. Recereaction... nah... sporting events... nope.... movies, plays, cruises, restaurants... not interested.
And yet the market pulled lower, as if to day... see! I can move lower. Actually its been doing it all week. Nasty late day swoons coming from fresh post Virus highs.
With the SPY at $335 this morning I thought to myself for a second... that the new record highs for $SPY will have to wait until next week. Or will they?
The market seems to love making sharp moves to the upside just when it looks like its ready to collapse.
We will find out today. I do think the record high SPY is coming. We've come so close twice this week. Wednesday and Thursday. Perhaps today is the day. Maybe the move higher won't get sold hand over fist today? It remains to be seen.
Overall its been a wild week with the S&P500 on track for a small gain for the week and the NASDAQ a larger gain. But there has been plenty to offer for the bulls and bears alike. And of course no shortage of negative headlines
So its Friday. I come into it with calls. I'm still holding tiny positions in options I've locked in 90%+ MDB ROKU and 50% of NTES and TWTR. I added to make a full position of $NTR $40 calls for next week. And late in the session I bought C lotto calls that expire today. The financials seem to be taking the brunt of the early downside action. My thought process with buying any financial call option is the sell off for the longer dated bonds and a steeping yield curve. Last Friday the financials limped out of the gate, but came on strong in the afternoon.
I do think the market could make another attempt at new record highs for the S&P500. While it does not look promising right now, and looked even less likely about an hour ago, this market has made a habit of coming back strong even stronger from weakness.
All the talk out of Washington about stalled talks for more stimulus and extended job benefits... its clearly a negative. However the market is not blind to this, and has rallied... hung in there despite this. To me that means the market sees this getting resolved favorably at some point.
This market the last 10+ years can be summed up almost perfectly "buy" a BofA TESLA analysts who has been bearish $TSLA for 8+ years with a sell and underperform rating. Over that time he has raised his price target from $39 to $1750. Wow..
$TSLA Analyst bearish with SELL and Underperform rating for 7+ years while raising price target from $39 to $1750 over that same time... or roughly a 4,400% price target GAIN while being 100% negative every step of the way 🤔🍋🤔🍋🤔🍋🤔🍋🤔https://t.co/ikYBPQ2nbc
— UPBOptionMil (@UPBOptionMil) August 14, 2020
And this entire stock market has been almost the same. Rare are the bulls who from 2009 were calling for an EPIC rally for the market. It's been littered with crash calls and imminent recession/depression articles. Carl Icahn years ago crafted a long winded DANGER AHEAD video.
Despite it all. Despite all the negativity the market continues to rally. This most recent VIRUS induced dump and rally is perhaps the exclamation mark on the last 10+ years.
Oh my .... I'm on the soap box longer today than yesterday. I am sorry. Thankfully JB will be back on Monday... and I can step off the soap box and crawl back under it.
My point is... and I will write a piece about it in the coming days, is I think bears need to change their perspective 100%. If they want this market to collapse they need to be rooting for prosperity, for a BOOMING economy. Not for its demise.
Alright on to today. I apologize in advance, but right now I don't anticipate making too many trades. With the $SPY at $335 this morning my thought process was... what a great dip to buy.
We are now almost $2 off the lows. I'll probably wait at least an hour into the session before I start looking for a trade or two today.
BIDU perhaps on the $3 billion share buyback announcement... up from $1 billion. I may look for a few calls.
Let's see how the market opens. Are we going to pull back down to the overnight lows around $335? If so I think that will make a great lotto call opp.
Are we going to just chop around flat and -.25% on the SPY the first hour so so? I think that also offers a decent upside opp.
If we spike higher out of the gate, I think we could be setting up for a similar outcome as yesterday and Wednesday with a sell off.
So until the dust settles a bit, I'm going to be cautious today.
I'll update the analyst comments in 30 minutes.
Thanks! TGIF... have a great day!
-UPB