Markets rallied to start the week, with the S&P adding .90% putting an end to a 4 session losing streak. Asia markets tumbled overnight while Europe indexes are falling this morning. U.S. futures are pointing to a rough open down .68% as I write this. The Dollar is higher while Yields, Oil, and Gold are all lower.
Markets are back in sell mode this morning after disappointing China data to include double digit declines in imports and exports for July, coming in much worse than expected and at levels not seen since 2020. There is also DeJaVu here with some reports of another possible default in China:
https://twitter.com/CathyYuanZhang/status/1688808474225061889?s=20'
UPS also lowered their guidance this morning... UPS can be seen somewhat as a proxy for commerce so certainly not helping futures. Tomorrow after the close we get DIS earnings and then CPI data on Thursday and PPI data on Friday. Somewhat hard here to put a bullish spin on the market right now with this morning's action. I fear now that 50dma may come in play on the SPY at $439.97 before the week is out. Not going to be adding any puts just yet, but will be very cautious on the long side for now unless I am adding later dated strikes(Nov and beyon) or weekly strikes.. The lower bollie on the SPY is $444 so would likely be some support if the selling continues after the open:
OLED rallied again yesterday, closing up over 4% and over that $160 handle. I used the move to lock some of my calls in for over 100%. Likely will gap lower at the open today but do think it can find its way above $170 in the coming days and possibly $180:
'22 levels:
If markets continue to tumble will use the $158 or so area as a stop and revisit.
Weight-loss drug companies and anything affiliated with them are rallying this morning after a landmark study from NVO showed a 20% reduction in cardiovascular risk when folks used Wegovy:
VKTX is back in play here. If any of that pans out and VKTX has positive data on their oral solution in the fall, VKTX is much higher(and likely acquired). LLY also reported a monster beat and raise this morning showing just how big the GLP-1 market is and how much bigger it is gong to be. Plenty of fish in the sea IMHO. May look to re-enter VKTX calls and may look to add some more TERN here.
WW is also rallying this morning in sympathy to the NVO news. GS reiterated their Overweight rating yesterday and raised their PT to $17 from $13 yesterday:
By the time WW is the leader in helping people lose weight via GLP-1 the stock will be much, much higher. Obviously debt is an issue for the company so a debt raise is not out of the realm of possibility, but do think they would wait to $20 or so. Will be watching again to add some more strikes today. If there is any silver lining from WW's post-earnings plunge it is that it held the 50dma and that shorts likely doubled down on their short... ie. the road back up will be fun:
TWLO shook off early losses to close slightly in the green. I would have liked to close some of my calls out to cover costs before earnings after the close but looks like I will not get the chance. Still like the story here and think it trades north of $70 after earnings but of course the risk is a miss or inline numbers and the stock languishes in the $60s:
AXSM sold off yesterday, despite higher than expected revenues and SAGE's FDA denial. The stock is receiving upgrades this morning. Will be watching again for another opportunity to add some calls:
Thankfully passed on AYX and RNG for earnings after the close yesterday. Both were punished on weaker results. Still eyeing RBLX for Wednesday morning if I can find a decent r/r strike.
If things start to deteriorate today, will likely look to TZA calls as a hedge.
And here is what I am watching today: TZA, VKTX, AXSM, YOU, WW, RBLX, ULTA, CMG, SPOT, TEAM, ROKU, OSTK, SHW, BIDU, ALGN, ISRG, ANET, SSYS, BLK, IBM, and NFLX.
Let's have a great day!
-JB