Markets rallied on yesterday, with the S&P adding 1.10% as Yields fell. Asia markets closed higher overnight while Europe indexes are in the green this morning. U.S. futures are pointing to a higher open, the Dollar, Yields, and Oil are higher while Gold is lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-309/
Stocks rallied yesterday, in a solid session that saw nary a dip. It was a quite different day then the previous couple sessions as stocks actually bounced off lows at the open and never looked back. After the close, NVDA posted a monster beat and raise. Not only did they best estimates by a few billion dollars in revenues, they raised guidance by another few billion dollars. The demand to power AI is real... but is that much of a surprise? NVDA is gapping higher by $30 as I write this. The implied move was $42.83 or 8.5%. Most of the calls will lose premium. The stock was up 220% before the earnings. Boggles my minds that the market had it mispriced to start the year to the tune of over $600 billion, and now it seems all the analyst just keep hiking their price targets:
Will be interesting to see how it trades today. The SPY is right at that $445 handle as I write this and likely resistance with the 50dma at $444.61. Hopefully this can hold. If not, that $440 support comes back into play into tomorrow's next catalyst... Powell's Jackson Hole speech:
I didn't add anything yesterday... I didn't 'trust' the rally. Would love to say the morning gap this morning holds, but I have a feeling this may reverse. AI and all the other #AI related names like AVGO, ANET, etc were gapping higher on NVDA's report but have since given some of the gains back. If markets can find footing, I may revisit AI. At the same time, I would give a 75% probability that these names give their gains back. If NVDA starts to break under $500, may look at some spec puts in LRCX, ANET, and AVGO:
And here is AI, which could see $35+ it the market holds today(would add $36 or so strikes, possibly next weeks):
More lackluster days for WW and VKTX. Wanted to add some VKTX but it traded flat into the close. Will be watching again for an entry today:
WW:
NVDA earnings and AI hype pushed BIDU up higher this morning after it continued its post-earnings rally yesterday. Still have my eyes on it. If it holds $135 today, may look at some later dated strikes:
Today is the big day for ULTA, as they report after the close. I am so tempted to add some calls but it feels like the name will fall even on a decent quarter. Will wait until tomorrow to possibly trade. ULTA has a history of having some large/outsized moves after trading opens so could present an opportunity:
And lastly, still eyeing some ROKU. Reports out yesterday said NFLX continues to enjoy strong sub adds. Only bodes well for ROKU. The stock is well off its post-earnings high and think only a matter of time before it trades back above $90 and into triple-digits:
And this is what I am watching today: ANET, LRCX, NVDA, ROKU, ULTA, BIDU, VKTX, GLD, DUST, GLL, WW, ALGN, CMG, QQQ, SPOT, TEAM, ISRG, BLK, IBM, and NFLX.
Let's have a great day!
-JB