May 1st, 2024 Watch List

Welcome to May! Stocks tumbled on Tuesday, with the S&P falling 1.5% while the Nasdaq dropped over 2%. Asia markets closed mixed overnight while Europe indexes are mostly lower this morning. U.S. futures are pointing to a red open, the Dollar, Yields, and Oil are lower while Gold is higher.

And here is my rant from yesterday if you missed : https://www.optionmillionaires.com/jb-afternoon-rant-april-30th-2024/

It was a rough session for markets on Tuesday, with stocks opening slightly lower, and then melting into the end of the day with selling pickup up at the close. The ECI or Employment Cost Index was well above expectations for this Q, consumer confidence for April fell, and the Chicago PMI number also came in lower than expected. As I mentioned on the rants, I have never seen the ECI data ever be discussed or cause for market moves. Similarly to the JOLTS report last summer and fall. Just shows how squeamish the maker is on any data point that shows inflation may still rear its head. If there is a silver lining, it is the Vix, which is not rallying anywhere near the amount it did two weeks ago. April was the worst month for markets since October and now we get into the timeframe where folks start saying, 'sell in may and go away'. Today is another big day, with the Fed statement and presser on tap at 2pm and 2:30 pm respectively. The S&P is pricing in an over 1.1% move, the biggest implied move for a Fed Day since... you guessed it... May of 2023. I would love to put my bull horns and thinks here will be some bounces today but will remain cautious. The SPY closed back under the $504.50 handle. If that is not reclaimed in the next day or two, the SPY is coming down to $487 and below. If markets can't find a bid before 2pm I may start looking again at some hedges. Hopefully Powell can ease concerns at 2:30 and markets can find there footing:

And will be watching the VIX closely for any upside moves:

As discussed on yesterday's watchlist, I was looking to finally lock my CAVA calls in. The market gods listened and spiked the stock in the morning. It rallied all the way up near $75. I did not want to lose the profits so I locked the calls in for 100%. As I keep saying, anyway you look at it, the multiples on CAVA are insane. Doesn't mean it can't overshoot or get FOMO. Will keep on watch for another entry:

At 1pm yesterday, reports came out that the DEA was ready to reclassify marijuana to a less dangerous drug. Huge and much anticipated news. Cannabis names soared and my calls came back to life. CGC rallied 78% to close at $14.88 while ACB rallied 46% to close over $9. Been saying CGC to $17-18 and ACB to $11-12 for the last month or two... looks like it is coming. I was able to close more of my CGC calls for over 400%. Will look to close some of my ACB calls today and likely just ride the rest in both like I have been doing:

and ACB:

I also scrambled to add some IIPR calls - it is an under-the-radar cannabis name that I think will find some legs in the coming days. Call me crazy, but I think IIPR can trade to $120+ in the next few weeks. I may look to add some more strikes today while also looking to lock some of my May calls in for 100% to cover costs when I get the chance:

VKTX closed up another 5% yesterday and in the green for the 7th session in a row. I finally locked some of my June calls in for over 100% to cover costs and get some cash to add some higher strikes. Will be watching today for some possible later dated, further out-of-the-money strikes. A nice slide here showing all the mega-cap bio names that do not have a GLP1 asset.. only a matter of time IMHO:

It finally looked like ROKU was set to bounce, after announcing an advertising deal with TTD. The stock traded up into the $61s but then fell with the rest of the market to close down 1.7%. I added some May strikes. May look to add some June calls on any strength. Think it catches fire soon:

TERN couldn't get going yesterday, closing down less than 1%. Still love this one going forward and eyeing some later strikes, likely into the fall:

TRUP closed off 6% yesterday on no news or catalyst. This morning LMND announced a great Q and cited their pet business. Not sure it moves TRUP much. Will hold my call into tomorrow with the risk the company posts a disappointing Q and my calls feel some pain:

Was eyeing PYPL calls yesterday after their earnings but passed. Will be watching again today if the market finds a bid. Also watching SQ, they report earnings tomorrow.

And lastly. was looking for possible put hedges yesterday in the familiar names like AVGO, LRCX, and MDB but the premiums are insane. May nibble a few far out-of-the-money put hedges if things get dicey into the Fed... ie. SPY $497-498 or so.

And here is what I am watching today: VKTX, PYPL, SQ, AVGO, LRCX, MDB, CAVA, TERN, ROKU, IIPR, CDLX, AI, BIIB, DELL, AVAV,  POOL, URI, GWW, VKTX, TRUP, SE, MDB, IIPR, NOW, TZA, ,SPOT, EW, SNOW, LRCX, GPCR, PYPL, and V.

Let's have a great day!

-Jb


JimmyBob (Scott)has been trading equities for over 15 years, a majority of which were OTC micro-cap stocks. He started trading high risk stock options over the past 7 years, and has proven winning trades in excess of 15,000%.

As one of the Co-Founders of optionmillionaires.com, Scott enjoys sharing his knowledge with other investors through timely blog posts, daily watch lists in the forum, weekly webinars, and helpful advice within the chatroom.

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