It's Friday!!  It feels a little like Thursday, the Monday holiday kind of threw everything off for me... but its Friday!  Yesterdays unexplained swoon is carrying over into todays session.

UPB here.. JB away for another day.

Yeah you could use the Virus as an excuse for yesterdays mid-day collapse.  Or the fact that China remains shut down.  Or perhaps its the yield curve getting tight again.  There is always an excuse, but yesterdays unexplained smack down was an eye brow raiser.

Of course markets digested it and rebounded.  Still closing lower for the day. So here we sit with another Friday flop on our hands.  Fridays have not been very bullish in 2020.

The calls for a market top are out there.

One thing is for certain... today we are one day closer to that market top.  To that recession.  To whatever bearish perspective that has been thrown out there the last 10 years.  We are one day closer.  Perhaps its today... next week... a month from now... next year... 2023... 2025... no matter when this market decides to roll over.. we are a day closer.  However expecting the market to drop every day has not worked well over the last 10 years.  Especially with the Central banks at the ready to avert market mayhem.


Look at $DE this morning. A new all time record high.  Perhaps that is marking the top?  Or is the market looking out 6+ months and saying... we aren't there yet?

Man!  How about Dropbox!  Looking good.  So was PINS last Friday at the open.. and then 300% gains turned into a 30% gain.  I'm going to be a little quick on the DBX trigger this morning and will probably add longer dated calls.  DBX  to $30 into the summer is not out of the question in my opinion.

Tilray made it happen yesterday- soaring 10% at one point.  I am still in calls for next week and will make another buy on those $22s some point today.

Some lotto trades for today:

SQ got some love from Citi this morning with tgt raise.  I will be looking for lotto calls if it opens lower.

CAT some calls as well at the open if its weak, on the heels of the DE beat.

Other than that I will be patient today and see what this market gives us.  A sharp decline out of the gate would offer possibly some intra-day lotto dip buy.  On the other hand a rip higher out of the gate would likely set up some afternoon swoon put trades.

See you in the room!

Notable Research Calls For Friday, February 21
  • Bernstein upgraded Sprouts Farmers Market (SFM) to Outperform as they are now bullish on the company's efforts to carve out a space to survive in the grocery market.
  • RBC Capital Mkts upgraded Chewy (CHWY), says stock shows favorable risk vs. reward.
  • Raymond James upgraded The RealReal (REAL), says valuation has become "attractive."
  • Evercore ISI upgraded L Brands (LB) to Outperform following yesterday's Sycamore Partners deal.
  • DA Davidson moved to Buy on WW (WW), says proprietary data show high and consistent brand sentiment scores throughout 2019.
  • SunTrust moved to the sidelines on Shake Shack (SHAK) highlighting near/medium term concerns, including potentially disappointing '20 guidance.
  • Jack In The Box (JACK) downgraded to Neutral from Outperform at Robert W. Baird; see a more balanced risk/reward equation in light of the year-to-date bounce in valuation metrics and some lingering risk factors.
  • Guggenheim downgraded Zillow (ZG/Z) to Neutral as they feel the path to profitability at Offers remains "murky."
  • Stifel stepped to the sidelines on Domino's Pizza (DPZ), mostly on valuation, following yesterday's Q4 beat, dividend news
  • Wells Fargo resumed coverage on ViacomCBS (VIAC) with an Underweight, $25 tgt (~14.5% downside) given their view that negative revisions paired with a big Q4 miss and softer 2020E guidance leave credibility irreparably damaged for the time being.
  • Guggenheim starts coverage on Guardant Health (GH) with a Buy, $103 tgt (~17% upside) as they see the company able to grow its valuation with TAM expanding events, such as moving into adjacent markets.



Gapping up/down: DBX +14%, TXRH +8%, DE +6% and ITT +4% after earnings, AVX +5% after M&A news, CHWY +5% after upgrade; FSLR -14%, ZS -12%, FSLY -6.5% after earnings, DPZ -1% after downgrade

Gapping up
In reaction to strong earnings/guidance

  • EHTH +20.8%, DBX +14.4%, DCO +13.9%, NCMI +12.5%, AERI +12.4%, BAND +10.4%, SFM +8.8%, TXRH +7.6%, ZIXI +7.6%, DE +6.3%, CENX +5.4%, USM +4.4%, GLOB +4.4%, ITT +3.8%, TDS +3.2%, CNNE +2.5%, CATM +2.4%, GLPI +2.1%, SSRM +2.1%, RY +2%, HTGC +1.6%, CFX +1.6%, PRAH +1.4%, WPM +1.4%, CNK +1.3%, CASA +1.1%, VICI +1%, SBAC +1%

M&A news:

  • AVX +5.4% (Kyocera to acquire all shares it does not own for $21.75 per share)
  • S +2.6% (TMUS and S amend combination agreement)

Other news:

  • BMRN +2.1% (announces FDA accepted for Priority Review BLA regarding valoctocogene roxaparvovec)

Analyst comments:

  • CLDX +10.1% (initiated with an Overweight at Cantor Fitzgerald)
  • CHWY +5.1% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)
  • WW +4.3% (upgraded to Buy from Neutral at DA Davidson)
  • AIRG +2.6% (upgraded to Buy from Neutral at B. Riley FBR)
  • REAL +2.6% (upgraded to Outperform from Mkt Perform at Raymond James)
  • LB +2% (upgraded to Outperform from In-line at Evercore ISI)

Gapping down
In reaction to disappointing earnings/guidance

  • LTHM -15.1%, FSLR -14.2%, CWST -12%, ZS -11.8%, APPN -10.5%, PBYI -10.3%, CNDT -9.5%, TMST -8.4%, HBM -8.3%, FSLY -6.5% (also names new CEO), VAL -5.4%, BOOM -5.3%, CUBE -5.2%, BLDR -5.1%, ROG -5.1%, PSO -4.9%, HSC -4.8%, ENV -4%, BJRI -3.9%, OLED -3.2% (also raises dividend), BYD -3%, COG -2.9%, CVA -2.4%, NBR -2.2%, COLD -2.2% (also to form strategic JV in Brazil; will acquire 15% ownership in SuperFrio), TECK -1.9%, ED -1.8%, PPC -1.6%, EBS -1.6%, PRA -1.5%

M&A news:

  • TMUS -1.5% (TMUS and S amend combination agreement)
  • PRA -1.5% (to acquire NORCAL Group for $450 mln)

Other news:

  • EYPT -26.2% (stock offering)
  • AGRX -11.2% (stock offering)
  • UTI -8.6% (stock offering)
  • NGVT -6% (CEO resigns)
  • DT -2.8% (prices offering of 25 mln shares of common stock at $34.50 per share)

Analyst comments:

  • BJRI -3.9% (downgraded to Hold from Buy at Stifel)
  • CAR -2.1% (downgraded to Neutral from Buy at Northcoast)
  • SHAK -1.7% (downgraded to Hold from Buy at SunTrust)
  • DPZ -1.1% (downgraded to Hold from Buy at Stifel)
  • ZG -0.6% (downgraded to Neutral from Buy at Guggenheim)

Have a great day!


Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

More Posts by UPB: View All | Private Twitter Feed: Access Now! (For Diamond Members)