It was a rough day for markets on Tuesday, with the S&P closing down over 1% and right near the lows of the session. Asia markets closed lower overnight while Europe indexes are flat this morning. U.S. future are slightly higher as I write this, the Dollar, Yields, and Oil are lower while Gold is higher.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-303/
Markets took a beating yesterday, as more negative news/data out of china coupled with reports Fitch is looking to cut more bank ratings took a toll. The SPY broke Monday's lows and then fell thru the 50dma late in the session. It almost looked like the SPY was going to close back above that $443.23 handle before a last few second pull into the close pushed the SPY to $442.89. This morning TGT kicked off retail earnings with a mixed bag, beating on EPS but missing on revenues and lowering guidance. Despite that, the stock is up nearly 9% in the pre-market. Tomorrow we get WMT. A good sign if these stocks can rally despite mixed results. We get the Fed minutes at 2pm today and will certainly move markets. An overly hawkish tone and I fear that $440 handle will break on the SPY. Anything other than that and I think markets find some support. I was looking to add some hedge positions on a break of the 50dma. I wasn't about to do that with 20 minutes left in yesterday's session. If the SPY fails to reclaim the 50dma this morning, will look to add TZA/FZA calls or IWM puts:
ANET opened higher yesterday, testing the $182 handle before pulling back. I used the move to close some of my calls out for over 100%. CSCO reports after the close today and could help bid ANET up for the rest of the week. Will likely hold the rest of my calls for a potential move to $190+ by Friday:
I also added some ROKU calls as outlined on the watchlist. The stock is setting up for another one of its $15+ multi-day moves. May look to add some strikes into next week as well:
And lastly, I added some ALGN calls. The stock now looks like the company is aggressively buying back shares here after 10 consecutive sessions of losses. Think $375+ comes by Friday:
Lackluster sessions for VKTX and WW. Pretty remarkable stat that every $1LLY moves higher adds over $500 million to its market cap or equivalent to 1/3rd a VKTX :
Still looking to add later dated strikes on both.
ULTA rallied in the morning yesterday, testing the $464s, after better than expected retail sales numbers. It then gave back all the gains throughout the day to close slightly in the red. TGT is rallying this morning so hopefully can put some wind in ULTA's sales for the move into the $470s and beyond:
SE couldn't hold $47 at the open and remained under-pressure for the entire day so I passed on trying to play a bounce. This morning the stock is receiving some downgrades. Will likely take this one off the WL and revisit.
Will be eyeing TZA calls today if the SPY fails to find a bid over the 50dma. If you take a look at the IWM, looks like a move to the 200dma will come quick if the selling resumes:
And potentially some spec puts in names like NOW and AVGO.
And this is what I am watching today: NOW, AVGO, LRCX. ULTA, WW, VKTX, ROKU, ALGN, FZA, TZA, CMG, QQQ, CMG, SPOT, TEAM, ISRG, BLK, IBM, and NFLX.
Let's have a great day!
-JB