Markets rallied to start the week, with the S&P adding 1.05% in a solid session. Asia stocks closed green overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a lower open, Yields, Oil, and Gold are higher while the Dollar is lower.
Markets rallied yesterday on no true catalyst and despite Yields continuing to rise. Some say it was earnings season optimism, others say it is the angst over the middle-east waning. Obviously it was more buyers than sellers. This morning retail sales numbers came in well above expectations. Just another piece of data that could lead the Fed to raise rates one more time, or at least have the market move up their expectations for one. As of right now, the market is giving a 30% probability of a rate hike into next spring and then the expectations start to increase for a cut. It is tough to stand pat on calling for more downside when the market rallies like yesterday, but still think $415-416 is coming on the SPY. That can change next week when the mega-caps report: GOOGL, AMZN, MSFT, META. There is also a slew of other large-cap names reporting. The SPY came up to that $437 resistance I mentioned yesterday and found sellers. Will be watching $433 as support today. If that breaks, sub $430 is coming into Wednesday:
I added AVAV calls yesterday, as outlined on the watchlist. I have liked the AVAV story for years, and it was one of my Top 5 stocks when it was much lower. They just reported a monster beat and raise at the start of September. The stock gapped to $125 on the news but has since gave back all its gains. The backdrop with Ukraine has been there for a while and now there is the Middle-East situation which is only going to add more demand for drones. In AVAV's most recent Q they reported a nearly half-billion dollar back-log and 40% top-line growth. Think AVAV comes and retests that $125 handle(and beyond) in the coming weeks, even if the market comes under pressure. Will look to close some of the October strikes, when I get a chance, to cover costs and ride the rest:
Hopefully WW found a bottom. It closed up nearly 5% yesterday. It remains volatile, just hoping that volatility is to the upside now and back over $13. Still holding what I have for now:
SHW traded up 2% yesterday with the market. This morning an analyst lowered their PT to $295 from $305. Hopefully puts a bit of pressure on the. stock. Still holding freebie puts and may look for some Nov strikes today on weakness(and after I close the Oct ones):
DPZ was trading between red and green for most of the session yesterday, before finding an afternoon bid to close up over that $350 handle. Chart still says down to me with that $343 handle being key support once it gets there. Will be eying for some possible Nov puts today:
AZO closed up nearly 2% yesterday. Will need a big move by Friday for my puts to pay:
Still eyeing ROKU calls as a sympathy trade into NFLX earnings but thought the stock would be rallying more yesterday with the market - especially since it is off over $30 since September after they raised guidance. Will be watching again today for a possible entry. A good sign that it held its 200dma at $65:
Thankfully I was finally not holding any LULU puts heading into this week. The stock is being added to the S&P 500 and it rallied over 10%. Will wait for the dust to settle and I may revisit on the put side for a move back under $400. My favorite fades are index additions that artificially raise a stocks price:
Still watching LRCX and MDB as some spec puts if the market fails to find footing today.
And here is what I am watching today: NFLX, ROKU, PPG, SHW, MDB, LRCX, TZA, VKTX, LLY, NVO, TWLO, AZO, ULTA, ORLY, NOW, SITE, MELI, ADBE, AVGO, WIX, ALGN, SPOT, OKTA, CMG, QQQ, BLK and TEAM.
Let's have a great day!
-Jb