Markets fell on Thursday, with the S&P closing down 1.35%. Asia markets closed in the red overnight while Europe indexes are higher this morning,. U.S. futures are pointing to a bounce, the Dollar, Yields, and Oil are lower while Gold is higher.
Markets gapped higher at the open yesterday after a monster beat and raise from NVDA. After the opening bell rang, it was all about profit taking, as AI/Chip names reversed gains and traded lower into the close. NVDA, which opened over $500, melted for the entire day and almost finished the session in the red despite the monster report and a slew of upgrades from analysts. People will try and rationalize the move yesterday but seemed like typical 'sell the news'. This morning at 10:05 am, Powell speaks at Jackson Hole. Last year he induced a 2% sell-off with his hawkish commentary. Will need to strike a balance between being aggressive enough to keep inflation in check, but not overly aggressive to cause a major recession. The 50dma is a story now on the Nasdaq and the S&P. The Nasdaq has tried and failed to break and hold the 50dma 5 times in the past few weeks while the S&P has failed two times, including yesterday's reversal. I posted yesterday about lower highs and lower lows:
Need that cycle to change or $420s are coming soon on the SPY. I hope not, but open to that possibility if markets fail to find footing today:
I wrote on yesterdays watchlist that I gave a 75% probability the morning gap would be sold and markets would go red:
In hindsight, wish I had grabbed some LRCX , ANET, and AVGO puts ontop of my PANW. But PANW still panned out well. I was able to close most of PANW puts for 100% and 300% and held the rest into today. Think a move south of $225 is possible but will use the $230 or so area as a stop. PANW charts is messy with its earnings gap from Monday. Would not be surprised to see the gaps fill in the next week or two so will continue to have on watch:
Rough sessions for VKTX and WW. Not any commentary to add besides that I will continue to look for some later dated strikes on VKTX.
FAZ closed slightly higher yesterday. Something of note is it came down to its 50dma as well and bounced. Still think FAZ will offer one of the better hedges if we fall next week. May look for some more strikes if the SPY reverses its opening gains today:
ULTA reported a great Q after the close and slightly raised guidance. Surprised the stock is not up more, considering it was just $490 a few weeks back and has sold off on no major catalyst outside of weak DKS and TGT earnings. Think folks are starting to position for a. weaker US consumer, less cash to spend on higher-end discretionary items like ULTA products, and other factors. So likely ULTA is more of a Macro story then micro... ie. folks are factored on things outside ULTA's c control. Would think ULTA will have a wide swing at the open. If it can't break $430 I have a feeling it may sell-off today to $400 and possibly below. Will be watching for some inexpensive spec options to play for the swings at the open:
If markets hold their ground and find bids during Powell' speech, will be eyeing ROKU, AI, and BIDU for some possible calls. For what it's worth, BIDU received another PT upgrade this morning.
And here is what I am watching today: ULTA, AI, 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