Ahead of todays FED decision, stock futures are modestly higher. Will the FED shock the market today?
I think any shock will be of the dovish variety, sending stocks to fresh record highs. While the sharp upside reactions we were accustomed to seeing during the Bernancke and Yellen era's are gone, I think today's reaction will remain somewhat muted, with a bias toward continued upside. The market has been chopping around the last few sessions, consolidating after last weeks record highs.
China trade war headlines have abated, and this morning the China large Cap ETF is set for more gains. I think this trend could continue, meaning I just may start looking for some beaten down China ADRs... $IQ anyone?
With that being said I am positioned for upside in a host of names, all with longer term stock options, aside from $FB, $GS, and $DBX. We know how quickly one Tweet or regurgitated trade war headline can smack futures down, so despite my bullish perspective of the market, trading calls on a weekly basis continues to come with that risk.
$FB
Facebook looked great after I entered weekly calls on Monday closing over $165 after hitting 5 year support. Wouldn't you know it, the stock got crushed yesterday on an Instagram headline. However the dip was bought and the stock ended the day flat. I think its heading back to $170, and I am trading for that to happen this week.
$TXMD
New short interest numbers came out after the close yesterday and $TXMD now has RECORD short interest. 62+ MILLION SHARES. 36% of the FLOAT! And some 29 days to cover. In the face of record positive news for the company! I continue to trade for the stock to move even higher in the short to medium term. The risk being the 3rd upcoming FDA decision of 2018 coming at the end of October.
At $TXMD rallies on positive headlines in 2018, those 62 MILLLION shorts are seeing their bearish bets go further and further underwater. The stock is nearing a key wedge breakout at $7.50.
$VSI
The stock has been subject to a sharp move lower, a lot of it from negative momentum. Short interest grew by some 10% according to the latest report. I still think this stock closes the second earnings gap. I also think the most recent bout of selling is overdone. Could I be wrong? Sure. I could have been wrong about the stock when it was $6 too. There is risk to any trade.
$GNC
Just lovely. Another Vitamin stock with so much upside potential. The shorts havent even started covering yet per the last short report. I got the DEC $5 calls at $.10 before the move. I added other strikes with dates into 2019 and 2020. It may chop and move, but I think over the long haul this stock is going back to double digits. Just my thoughts of course. The shorts are betting on $0.00.
$GME
What a shakeout this week. The stock fell over 6% on Monday. Yesterday the stock continued to fall hitting $15.30. It closed the day over $16.00.
While the move lower may have shaken many longs out of the stock, I remain steadfast and think that move to $20 is coming buyout or no buyout. However, judging by the updated short interest, the shorts are nervous. $GME saw its short interest drop by over 6 million shares or 15%. Short interest still remains high, but I think that number is telling you, after we saw more short covering in the last report, that the shorts are giving up on their flawed blockbuster scenario.
I think a buyout is coming. Just my thoughts. I think its going to be $20-$21 a share. And I think its going to be announced over the next 30 days. Pure speculation on my part. If there is no buyout, the stock will see a drop in price. However I think the long term set-up, buyout or no buyout is for higher prices.
$FSLR
I remain in FSLR calls for a move higher. Momentum has shifted and I am trading for a move to $52.50+.
$MOS
$MOS hit a new multi year high yesterday. My DEC $34 calls continue to appreciate. I may look for 2019 calls in the coming days. As I said many moons ago, I think $MOS is in the early stages of a sharp rally. Just my thoughts. I could be wrong.
$SWHC
I still think the earnings gap will get filled. I am running out of time on my OCT calls though, and may look to add further out to capitalize on this possible move.
Calls for this week --- $DBX $GS
$GS was a tremendous winner last week. The $235 calls were $.11 and traded over $3.00 just days later. I have the $237.50 calls this time around. The stock is chopping in a narrow range just like it was early last week. I think it breaks higher again.
$DBX is gapping higher this morning. Last week I got into this weeks calls near the lows at $25. The stock continues to work its way higher and I will look to close the rest of my calls today.
That is all for now. Have a great day!