Stocks tumbled on Wednesday, with the S&P falling 1.56%, with pundits citing recession concerns as a catalyst. Asia markets closed mostly lower overnight while Europe indexes are falling this morning. U.S. futures are pointing to a lower open, the Dollar, Yields, and Gold are higher while Oil is lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-181/
It was a rough day for stocks on Wednesday despite PPI data coming in much lower than expected. In this environment, good news has been bad news for stocks and vice versa... yesterday that playbook did not pan out. It has been quite obvious for months now that the Fed wants unemployment to rise and possibly incite a recession. Have to think some of that is baked into markets already. Earnings season could help change the narrative. NFLX reports after the close today. Any inline or upside numbers and it could help alleviate some of the market concerns. The SPY closed near its 50dma yesterday and is gapping below it this morning. Would want to see that area reclaimed today or I fear we are headed under $380 again on the SPY:
NFLX has rallied nearly 50% from its October lows. Not saying it can't go higher on a beat on subs and/or solid numbers, just think the risk/reward is difficult. Instead, I went and added some ROKU calls as a sympathy play. ROKU reversed morning highs to close lower yesterday and is under $50 in the pre-market. Think ROKU will rally over $60 on any positive NFLX report, with the risk that a miss will push both stocks down:
ZYME tested the mid-$10s before pulling back yesterday. I used the move to lock some of my Feb strikes in for 100%. This morning they announced some positive Phase 2 data and there was also a large stakeholder purchase:
Think this continues to head higher in the coming days. I may actually look for some more strikes today to play for a move to $15+ in the coming months:
AXSM closed higher for the third straight session, and above that $70 handle despite the market weakness... a great sign. Will look to lock my January strikes in today and look to add some later calls for the move to $80+:
MASI has also rallied for 3 straight sessions. I think this trades north of $180 in the coming days even if the market is weak. Will look for some Feb strikes today:
ISRG is setting up nicely ahead of its earnings on Tuesday next week. If markets find any support this morning I may look to add some weekly spec calls and/or some strikes into next week to play for premium build:
It was a rough day for RBLX, U, SQ, and EVH. Most of those I have already locked in profits to cover costs. Still like those for higher in the coming weeks with some having earnings as a potential catalyst.
Certainly not going to be overly aggressive today and may look for some TZA calls as a hedge if the market rolls over. Would like to see a bounce today but would not be surprised to see another 1%+ pull.
Here is what I am watching today: MASI, ISRG, ROKU, NFLX,, ALGN, AXSM, EXAS, ZYME, SPOT, GNRC, VKTX, UDMY, RARE, SAGE,, IBM, and CMG.
Let's have a great day!
-JB