Futures are pointing to a .65% higher open as I write this, after a tentative deal on the debt ceiling was reached. Asia markets closed higher over night while Europe indexes are mixed this morning. The US dollar, Yields, and Oil are all lower while Gold is higher.
Last week was a roller-coaster for stocks, as they gyrated with seemingly every update around the debt ceiling. By the close Wednesday it looked like it was going to be a rough week but markets were able to rebound, and a strong rally on Friday pushed the S&P to a green close on the week and at the $420 handle - a spot I have been chirping about as a target for weeks. This morning stocks are gapping higher on a debt ceiling agreement. Things get tricky here. The road to $430 on the SPY is going to be much harder than the road from $410 to $420. Hopefully we get some churn here between $421 and $423 over the next few days before looking for the $425 test. At the same time, seems the market always does well in the face of headwinds. With the debt ceiling removed and the inflation narrative losing steam, what is the next one? :
AI, AI, AI... and more AI. It is everywhere. Seems every news channel you turn on has at least one clip on it everyday now. Loved AI as a play on the boom, but missed this recent move on the heels of NVDA's earnings. BIDU is a name I have despised for some time. The company was subsidizing money-losing programs with its search engine business. In recent years they stepped up rhetoric on their conference calls and earnings releases to highlight AI... think they were way ahead of the crowd here. I added some BIDU calls on Friday and was able to close most of them out for nice gains to cover costs and with some profits. May look to add some further dated strikes to play for a move to $140+ in the coming days:
ANET also continued its NVDA induced rally, soaring over 9% on Friday. I used the move to close most of my calls for nearly 100%, over 200%, and over 400%. ANET is gapping in the pre-market above $174. Will likely look to close the last out and revisit. The calls will likely open up 800% or higher so makes sense to taker the rest of the profits:
I finally went and added some August VKTX calls. The stock has languished as of late, with no big catalyst on the horizon. Just like the AI hype, the weight-loss drug hype is only going to increase in the coming weeks and months, especially with beach weather coming. The more folks research ways to play the boom, the more folks will find VKTX and their possible best of breed drug. Will be looking to close the last of my June calls in the coming weeks and will just hold the July and August calls for now:
I added some GLD puts on Friday. Think at some point Gold nears that $1900 handle as inflation wanes and the bears case on markets slips away(and not to mention Crypto coming back to life). Gold was testing the $1950 handle overnight only to find a bid early morning and rally. Will be watching today for other opportunities to play for some downside in the coming weeks:
SAM, an old favorite, received an upgrade this morning. Could be the kick it needs to finally breakout of the churn it has been in since February. If it can find a bid over $330 think a gap-fill near $360 is coming before June expiry. May look to add some calls today:
ROKU is showing some life again. Will need a big move for the rest of my freebie $62 calls... a break above the 50 and 200dma at $59.12 and $58.38 should send it where I think $65+ would come quick. May look to add some father out strikes today:
And still WING and DPZ as possible reversal plays.
And this is what I am watching today: SAM, BIDU, DPZ, OLED, VKTX, GLD, AMD, LRCX, MU, NFLX, GLL, ULTA, TERN, ZYME, SPOT, AXSM, SAGE, RARE, SRPT, BLK, EXAS, W, SHW, ABBV, and ALGN.
Let's have a great day!
-JB