Markets closed mixed on Wednesday, with the S&P and Nasdaq squeezing out small gains while the Dow finished slightly in the red. Asia stocks closed mostly higher overnight while Europe indexes are in the green this morning. U.S. futures are pointing to a flat open, the Dollar, Yields, and Oil are higher while Gold is lower.
It was another choppy session for indexes on Wednesday, with the S&P giving up early gains to trade in the red before finding a bottom at the noon hour. Markets then reversed and the S&P escaped with a green close, its 8th session in a row of gains. That $440 handle on the SPY looks like the next possible target and resistance. On the flip side, the divergence with small-caps is becoming somewhat alarming. The S&P is up .65% this week while small-caps have fallen nearly 3%. Like I mentioned on yesterdays watchlist, the small-caps preceded the S&P's sell-off in October, so something to watch:
And $171 is a key area on the IWM, would be a good sign if it can close above today:
RBLX gapped higher after the open yesterday after a strong earnings report. I used the move to close some of my calls out for 150%. The stock then started to chop around at the $40 handle so I went and closed the last of my calls for nearly 100%. They were weekly strikes so did not want to risk losing the profits. Not sure I will revisit this week but certainly a name I will be watching in the coming weeks:
TWLO rallied out of the gate yesterday, nearly testing the $57 handle. I used the move to close the last of my weekly calls for over 100% and held my calls into next week. The company reported a strong beat and raise after the bell yesterday and is gapping higher. Think $65+ is possible into next week so will likely hold the calls for that outcome while using $58 as an area I would salvage and revisit:
I also added YOU call after their monster earnings report. It is such a great story but seems to have many shorts in the name with a 14% short interest. There has also been negative press out from Bloomberg - these days would not be surprised to see some short sending in tips and paying Bloomberg to publish dirt. Either way, the company is flush with cash, has an active stock buyback program, and is growing top-line over 30%. Think mid-$20s in the coming weeks come if the shorts run out of ammo:
CDLX reported a slight miss in revenues after the close yesterday and a slight reduction in guidance. The stock is getting pummeled in the pre-market as if its going to zero. I am quite shocked at the reaction, almost as if the market was pricing in a massive beat and raise. My Dec calls will be finished pending any crazy catalyst like a buyout. It has bounced before after earnings dips so may look at some more spec calls for a move back into the double-digits:
TRIP gave back a bit of its gains yesterday. Still like the name for $20+ in the coming weeks:
LLY's Mounjaro drug was approved to treat obesity and it will be called Zepbound. Just adds to the total addressable market for WW. Hopefully today is the day it can clear that 200dma:
APP reported a strong beat and raise after the close yesterday and the stock is gapping higher this morning. Think U can have a strong sympathy move into their earnings tonight after the close. May look at some spec calls with the plan to lock/some or all in before the close:
AVAV rallied all the way up nearly $128 yesterday before giving back most of the gains. Was actually looking at some $135 calls but passed. May revisit today if the stock finds another bid while also looking to close some of my $130s to cover costs:
Other names on watch today: WIX, DIS, SPOT, and FVRR.
And here is what I am watching today: AVAV, U, WIX, DIS, FVRR, CDLX, RBLX, TWLO, EXAS, AAPL SQ, WW, 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