Stocks closed higher for the 3rd session in a row on Wednesday, with the S&P adding 1.05%. Asia markets closed in the green overnight while Europe indexes are rallying this morning. U.S. futures are pointing to a higher open, the Dollar and Yields are lower while Oil and Gold are higher.
Markets opening higher on Wednesday, chopped around after the Fed decision, before finding more buyers to close near highs. The Fed kept rates unchanged, reiterated their stance of 'high for longer,' and stepped back from saying they would cut rates anytime soon. It was construed as dovish and markets have lowered their expectations of any rate hike in the coming months while also raising expectations of a rate cut into the spring, despite what Powell said. Call me stubborn, but I still don't think we have bottomed yet on the SPY despite this weeks rally of over nearly 3% so far(and higher at the open). That $415-416 handle was key resistance earlier this week and now that $425 spot will be key. The SPY also reclaimed the 200dma yesterday so the $421 level will be key support:
I added some spec puts yesterday into the Fed decision. I added more MDB puts with the stock treading water despite the market rally. It traded down to $332 during Powells presser before closing at $339. Going to need a big reversal today/tomorrow for the puts to pay. I mentioned on my entry I would likely close on a move above $340... MDB closed at $339 and is gapping higher this morning. Likely not adding anything more here today:
I also added some LRCX puts, with the stock floundering around despite the nice AMD earnings. Sure enough, it has a last hour bid to trade from $594 to $606 and is gapping higher this morning. Will need a big reversal here as well for my puts to pay:
WW reports earnings after the close. The stock was decimated in October after hitting $13 and is finally holding the 200dma. I will be adding some later dated calls today:
SHW closed nearly flat yesterday while DPZ closed up over 1%. Still holding my puts there.
ROKU reported another strong Q after the close yesterday and this will be one of the few times I do not hold any calls into the report. Disappointing to say the least. It seems like there are still many who don't believe or even understand the story. I will be watching today for some possible spec calls for a move to $75+:
SQ is gapping higher this morning ahead of their earnings report after the bell and in sympathy to PYPL's great earnings yesterday. Not sure I will chase here but if I do, may look for some $50+ calls:
If market continue to bounce, will be a rough week for my puts. To make money on option trades, and especially the ones that are up 1000%+, one needs to have conviction. I'll take this week as another lesson and move on to the next trade.
And here is what I am watching today: ROKU, SQ, WW, V, MA. MDB, AZO, LRCX, LULU, ROKU, PPG, TZA, LLY, NVO, TWLO, AZO, ULTA, ORLY, NOW, SITE, MELI, ADBE, AVGO, WIX, OKTA, CMG, QQQ, BLK and TEAM.
Let's have a great day!
-JB