Welcome to the 2nd half of 2023! Futures are pointing to a flat open to start this holiday shortened trading week, with S&P futures up .02%. Asia markets rallied overnight while Europe indexes are in the green this morning. The US Dollar, Yields, and Oil the higher while Gold is lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-279/
Stocks ended the last session of the 1st half of 2023 in strong fashion, with the S&P rallying 1.2% and closing up 2.3% for the week. It was a record breaking 1st half, with the Nasdaq having its best performance on record:
All this in the face of plenty of negative catalyst... recession fears, rate hikes, war in Ukraine... and so on. The most talked about one now is the bad breadth... that only a few stocks account for most of the gains. A nice piece here:
Of course, all stocks heading higher in unison would be a welcome sign... but the fact that folks are piling into safer names is not a bad thing and maybe creates an opportunity for momentum names into the end of the year.
This week is another quiet one, with the Fed minutes coming out on Wednesday and the June jobs report coming out on Friday. Next week the Q2 earnings season will kick-off with the banks. It was an impressive rally last week in the face of more hawkish talk from Powell at the ECB forum - the market is now pricing in a 90% probability of another rate hike at the next Fed meeting at the end of this month. A little consolidation the next few days would bode well for more highs but certainly a tricky spot here with the SPY right at the upper Bollinger band. Not saying I am grabbing puts, just will be a little caution this week:
TRIP looks set for the next leg. It closed right above the 50dma on Friday and has a tight bollie setup which typically precedes outsized moves. Think $17+ this week and $18+ soon enough:
Speaking of tight Bollinger band breakouts. CMG just had one, with 4 solid sessions last week to break into all-time highs. I was able to close the last of my calls for $9 and over 600%+ only to see CMG rally into the close with those calls going for over $20. Think $2250 or so is possible but will wait for a dip before trying to enter, likely around $2100 or so:
IBM tried, but failed to hold $135 on Friday. Will continue to look to cover more costs on the way up. FWIW they report earnings on July 19th which means premiums should hold up:
FVRR started to show signs of breaking out Friday before giving back the gains to close up over 1%. Still hopeful on this one and may start looking at some later dated strikes to play into earnings:
Z is still trading above support. Only a matter of time before it breaks above $55:
Missed the gap fill on ALGN last week. It clears $360 and it is blue skies to $400. Still on watch here:
And lastly, Gold found a bid on Friday after the weaker than expected PCE data. Will need a break pot that $1900 handle soon for my puts:
Don't forget, half-day today and markets are closed tomorrow.
And here is what I am watching today: ALGN, CALX, FVRR, IBM, CMG, Z, SPOT, ULTA, ISRG, ROKU, MDGL, DPZ, YEXT, AMD, LRCX, MU, NFLX, QQQ, ZYME, AXSM, SAGE, RARE, SRPT, BLK, and EXAS.
Let's have a great day!
-JB