Markets closed higher again on Tuesday, with the S&P adding .56%. Asia stocks closed mostly higher overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a higher open, the Dollar is in the green while Oil, Yields, and Gold are all lower.
And here is my rant from yesterday if you missed: https://www.optionmillionaires.com/jb-afternoon-rant-march-19th-2024/
Markets gapped lower at the open yesterday and then preceded to bounce for the rest of the session, reversing the losses to close green. The S&P came close to another record close. There was not much in the way of catalysts for the bounce outside of NVDA paring its losses and folks buying the dip. Today we get the Fed Statement at 2pm and the Powell press conference at 2:30. No rate cut is expected and it will all be about Powell's comments and the updated dot plot. The recent hotter than expected inflation data could cause Powell to spin things a bit more hawkish, hopefully he can walk the tight-rope. The market is pricing in no rate cut at the May Fed meeting and a 50% probability of a rate cut at the June meeting. The Fed has been pretty much saying no cut until the late-summer or fall so someone is wrong. Either way, will be volatile this afternoon. The SPY chopped round that $512.50 support/resistance area in the morning before finally breaking through in the late morning. That area continues to be a key spot. If Powell is able to quell any concerns, the SPY could certainly see $520 before the weeks out. Any surprises and $504 on the SPY could be in the cards:
Small-caps continue to underperform and that 50dma on the IWM is getting close again. Will be watching:
AVGO sold off at the open yesterday, testing $1204 before staging a $30 reversal into the close. I added some more puts at the lows. In hindsight, I should have closed my higher strikes, which were solidly green. Either way, the stock finally broke its 50dma and closed below it. If the market gets dicey after the Fed, think it will offer a great hedge:
CDLX recouped most of Monday losses, closing up over 7%. Some of the move maybe from an insider buy, with a long-term holder Clifford Sosin adding $9 million to his stake:
https://www.sec.gov/Archives/edgar/data/1697919/000119380524000390/xslF345X05/e619381_4-cdlx.xml
He now has a 13.6% stake in the company. Also, I think the AMEX news they announced on the day of their earnings is under-appreciated. AMEX is known for their card member offers and the fact they now use CDLX for it is a huge deal imho. Not sure how the financials will work, though it looks like CDLX is on the hook to pay member rewards but then will also get revenue from the vendors. Either way, think CDLX heads over $20 in the coming weeks. May look to add more calls, which could include averaging down on the $20s and adding some April 22.50s:
VKTX oral data will be out any day now. Huge call volume has been hitting the name:
https://x.com/UPBOptionMil/status/1770422249801040035?s=20
May nibble a few more calls today.
Positive data will bode well for TERN and GPCR as I think it will just increase the odds of M&A in the space and/or increase speculation of M&A. Still eyeing more TERN calls and getting back in GPCR:
CHWY reports after the close and has traded back near all-time lows. As much as I think they will report a great Q and the stock will rally, I get concerned when a stock fails to find a bid into a binary event... especially one with a 15% short interest. If I do add any spec calls it will be April 22.50 strikes:
CMG, one of the fun ones to trade over the years, finally announced a 50-1 split. It was a great name over the years but recently the spreads have become almost unplayable. This split should make CMG fun again:
And lastly, like I mentioned yesterday, will be eyeing NFLX after 2pm for a possible hedge if markets get dicey and the SPY loses support for a move under $600:
And here is what I am watching today: VKTX, TERN, GPCR, NFLX, AVGO, LRCX, CHWY, CDLX, ADBE, LRCX, AVGO, BURL, NOW, SNOW, MDB, SE, EDIT, AMD, MU, URI, Z, AXSM, WIX. DWAC, SPOT, ADBE, MASI, ALGN, STAA, W, YOU, ALT, TWLO, ISRG, STAA, BIIB, GILD, RDFN, Z, AI, TRUP, ULTA, RBLX, TGT, AVAV, EXAS, AAPL SQ, LRCX, LULU, LLY, and NVO.
Let's have a great day!
-JB