Markets closed mostly lower on Tuesday, with the S&P dropping .28%. Asia markets closed higher overnight while Europe indexes are slightly in the green this morning. U.S. futures are pointing to a bounce, the Dollar and Gold are higher while Yields and Oil are lower.
And this is what UPB is reading this morning;https://www.optionmillionaires.com/morning-reads-308/
Markets opened higher on Tuesday only to give back the gains into the noon hour. Unlike Monday, markets failed to hold a bounce and closed near the lows of the session. Seems the market script the past few sessions has been sell the open. Will be interesting to see how today pans out. After the close today we get earnings from NVDA. I posted on Twitter, whoops I mean X, earlier that NVDA seems to have supplanted AAPL as the market indicator. When AAPL did well, seemed the market was doing well and vice versa:
NVDA will have to post a monster beat and raise for the stock to rally. It may need a beat and raise just to hold its gain. Hoping for the former. If the latter happens, may not be a fun Thursday for markets. Friday we get Powell's speech at Jackson Hole. Not a fan of Bullard, but a nice interview in the WSJ today:
He thinks more rate hikes will be necessary and the market is not pricing that in. He also thinks the Fed has done a great job - would have to agree with that... ie. somehow the market has baked in all the rate hikes so far and the fact that 30yr mortgage rates are over 7% and at 20 year highs. I am remain cautious here. As much as I would like to see the SPY back over $440, think the more likely outcome is a break into the $430s and below to shake more folks before we can find some support. Again, not putting the bear suit on, but will remain cautious on the call aide and open to adding more hedges:
I closed my AI calls yesterday morning for a small profit. I did not like the opening reversal and AI tends to trade with the market. AI could be up 5-7% tomorrow if NVDA posts a monster report. On the flip-side, it may melt back near $30 on any inline number or miss. I will likely sit on my hands on this one and revisit tomorrow AM:
Another green day for VKTX yesterday, albeit a small 1% gain. Crazy how Ozempic and all the GLP-1 see different headlines everyday... some negative, some positive. At this point, I don't think it matters much which which type of article it is. It just shows how poplar these drugs are becoming and how the TAM will continue to grow. Now it's saying taking ozemppic can kill you if you need surgery... The first thing a doctor or physicians assistant asks at all appointments is if you are on any medicine. What planet these people live on? Crazy piece here and just plays in the hype, click-bait, ect.:
https://www.cbsnews.com/boston/news/ozempic-wegovy-surgery-issues-weight-loss-drugs-medications/
And another piece in the WSJ:
https://www.wsj.com/articles/ozempic-weight-loss-drugs-carry-costly-complicated-logistics-a73385de
As if margins are going to make anyone feel bad for these drug companies. Someone will figure it out, but again, just plays into how big the hype is on GLP-1...ect. Moral of the story, will be looking to add more VKTX today:
Another rough session for ULTA after DKS posted a miss causing the stock to tank over 24%. It wasn't even a big miss by DKS and think folks will start to read-thru the results and think ULTA maybe at risk as well. Will wait until they report Thursday and revisit Friday morning:
Not putting on my bear suit just yet but do think a way to play NVDA earnings maybe with AVGO and LRCX. If NVDA falls on weaker than expected earnings, these names offer a nice risk/reward on the put side. I may nibble a few lotto puts today if the market fails to hold ground:
LRCX:
WW closed under $10 and that setup from last week is at risk of not panning out. Will need to recoup that $10 handle today. No plans to add any more calls just yet:
BIDU reversed the morning gap to go nearly red yesterday, before bouncing back to close up 2%. Hard to think it will trade on its own merits right now with all the concern on the China economy. Will likely stay on the sidelines but will keep on watch. Once things settle down think BIDU will be a great play on #AI and will move north of $150(and likely higher):
And of course, still have eyes on ROKU here:
And here is what I am watching today:LRCX, NVDA, NOW, AVGO, BIDU, ULTA, VKTX, GLD, DUST, GLL, WW, ROKU, ALGN, CMG, QQQ, SPOT, TEAM, ISRG, BLK, IBM, and NFLX.
Let's have a great day!
-JB