Stocks put an end to a 3 week losing streak, with the S&P adding .79% last week. Asia markets rallied overnight on more China news while Europe indexes are also in the green this morning, U.S. futures are pointing to a slightly higher open as I write this, the Dollar and Oil are lower while Yields and Gold are higher.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-311/
Last week was a choppy one for markets, with the S&P alternating between gains and losses. The much anticipated Jackson Hole speech from Powell came in somewhat more hawkish then expected. Expectations for at least one more hike this year rose while expectations for 2 hikes before the year is out also when up, albeit from an 8% probability to a 10% probability. At first, markets fell on Powell's hawkish comments before finding footing into the afternoon. Think markets like the idea that the Fed is not going to be quick to reversing the tightening cycle. Not sure that bodes well for a huge rally into the end of the year, but should help thwart off any major market tumble. Nice little tweet here from Ryan D:
Still some earnings this week from names like LULU, AVGO, CRM, CHWY, and others. More on LULU below. We also get PCE data on Thursday. Seems the last week or so markets have sold off after a market gap. Hopefully we can hold the gains today and start heading back to that 50dma by Tuesday or Wednesday. If not, the trend of lower highs and lower lows may continue and we see $420s on the SPY shortly:
A nice read on Gold and some historical in Barron's
https://www.barrons.com/articles/september-bad-stocks-good-gold-b0497678?mod=hp_DAY_5
September is historically the best performing Month for Gold with an average 18.% gain. Something to keep an eye on but despite that, think there is still more downside coming for Gold. That 200dma at $1915 is looming, an area it has not been below since late 2022. May look to add more positions to play for a possible test and break in the next few weeks:
WW closed down 6% last week pn lackluster action. Almost seems like it needs a catalyst, like an analyst upgrade. Either way, think once it reagins its footing, should see $12+ in quick fashion. Not adding any more strike just yet:
VKTX chart is getting tight. Still eyeing some later dated strikes to encompass data:
China announced more measures overnight to try and stabilize equity markets. Surprised BIDU is not gapping up more this morning. As I have been saying for a few weeks now, think BIDU will eventually embark on a move to $150+ after its strong earnings and updates on #AI projects. Sept $150s look interesting or even the Oct $165s:
PANW puts paid out nice last week, thankfully. I took the last off on Friday after it looked like markets were bouncing. If markets reverse today or tomorrow, may revisit for a move south of $220:
I tried to play some ULTA puts as outlined in the watchlist. I missed the initial drop from the $320s to under $310 at the open then tried to play for a move under $300 with some lotto puts which did not play out. Have to think there is more at work here than just the micro with ULTA. A strong beat and raise should have the stock at least back to $330+, instead it sold off. Likely a sign the market is starting to price in consumer weakness in some of the higher end names. Will be watching for more opportunities to play for downside into the $200s this week:
LULU reports Thursday after the close and could be a name that has a similar reaction as ULTA even on a strong Q. I may look to add some spec puts today on weakness to play for premium build by Thursday with the hopes of being able to close some/all out to cover costs with profits. LULU had a great report in June closing up over 11% but almost looks like it wants to fill that gap at $330 or so. FWIW It has a 9% implied move this week:
ISRG was running on Friday on no news to speak of. The stock has been pummeled despite strong earnings as names that may lose business due to GLP-1 come under pressure. Somehow folks think there will be less surgeries because of GLP-1. I guess one could make that case but not sure how much of their business is really derived from procedures caused by folks being overweight. It is higher in the pre-market again and looks ready for a move to $320+:
If market hold their gains in the morning may look at some AI, ROKU, and ISRG calls.
And here is what I am watching today: LULU, GLL, GLD, ISRG, VKTX, ULTA, AI, LRCX, NVDA, ROKU, ULTA, BIDU, WW, ALGN, CMG, QQQ, SPOT, TEAM, BLK, IBM, and NFLX.
Let's have a great day!
-JB