October 19th, 2023 Watch List

Markets tumbled on Wednesday, with the S&P losing 1.34%. Asia stocks closed lower overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a flat open, the Dollar, Oil, and Gold are lower while Yields are higher.

And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-340/

Markets opened lower on Wednesday, and then melted for the rest of the session, closing at lows as angst in the middle-east and rising Yields weighed. Seems every day now there is a headline saying Yields are at new decade highs. The higher they go the worse it is for debt-laden companies, the U.S. debt, and for early-growth companies looking for capital - along with many other negative outcomes. Hopefully this cycle ends soon and the market can start pricing in some rate cuts. Powell speaks at the Economic Club of New York at noon today and his comments could certainly move markets. Will be interesting how he will spin the recently strong economic data, the hotter than expected inflation reads, along with the Geopolitical tensions. Hard to think a hike will come again before the year is out, though Yields are telling a different story. I mentioned a break of that $430 handle on the SPY was possible this week, just didn't think it would happen by Wednesday. Will be watching that for support today. If the selling continues, that $427 or so handle is next:

<start 1987 rant>Not here to fear monger, but today is the 36 year anniversary of Black Monday. Time for the media outlets to queue up their headlines and click-bait pieces like they always do. Here is one:

https://www.marketwatch.com/story/wall-street-warns-of-black-monday-repeat-just-in-time-for-36th-anniversary-fb6a3f1f?mod=home-page

Of course, things are different now, with circuit breakers in place. But it does give folks an opportunity to draw some parallels between now and 1987 along with some fancy chart overlays. <end 1987 rant>

NFLX and TSLA both reported earnings after the close yesterday. NFLX smashed estimates and raised guidance while TSLA missed on both ends. Not sure one can draw any market trends from the results, making next weeks mega-cap earnings even more important. ROKU is moving higher this morning in sympathy with NFLX earnings but my calls will need a massive move before next week ends. NFLX is trading up into the $390s. Will likely sit on my hands on that one.

SHW closed down over 4% yesterday after a downgrade, testing lows not seen since May. I closed the last of my October puts for over 100%. Still eyeing some November strikes. PPG reported earnings after the close yesterday that beat estimates while raising guidance. PPG is the largest coatings company in the world so could help keep SHW bid today. If that fails to happen today, may look for some $220 or so strikes:

With markets coming under pressure, I added MDB spec puts again. The name tends to be volatile on market moves, which makes it a nice lotto play. The stock found pressure in the afternoon, breaking under $360. I used the move to lock some of my puts in to cover costs. Will look to close some more today and possibly hold the rest into tomorrow using the $364 area as a potential stop:

I also added LULU puts yesterday. I know on Monday I said I would likely stay away form the name, but the pump from the S&P addition is just to good to pass up. The company added $5 billion to its valuation just because it was being added to the S&P. I get that funds and the S&P will be forced to add positions in the stock, but don't understand how the valuation won't revert some. These analysts point at every metric for valuations, pouring over ever 5 cent move in EPS, yet have no issue with a company trading up on something that has zero correlation to the companies valuation. Think LULU will come under pressure into the end of the week and retest the $390 handle:

A decent day for WW considering the market weakness. The stock still remains in a solid uptrend despite the wild swings. Earnings are coming soon as well, which could be the next catalyst:

AVAV tried to rally again on Wednesday, but succumbed to afternoon sellers. Still holding a few weeklies and my Nov strike. $125+ should come soon pending any crazy market shenanigans:

VKTX continues to trade like (poop) - reversing the morning gap yesterday despite the positive data update. Next catalyst is Oral data which should be out any day now. Hoping it holds here or heads higher before the release... these shorts are relentless:

LRCX reported a beat yesterday but gave mostly inline guidance. May look at some spec puts if it starts to reverse at the open.

DPZ received a positive analyst note this morning. Hopefully does not have much of an impact and it can works its way to $340.

And here is what I am watching today: LRCX, SHW, LULU, MDB, ROKU, PPG, TZA, 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

JimmyBob (Scott)has been trading equities for over 15 years, a majority of which were OTC micro-cap stocks. He started trading high risk stock options over the past 7 years, and has proven winning trades in excess of 15,000%.

As one of the Co-Founders of optionmillionaires.com, Scott enjoys sharing his knowledge with other investors through timely blog posts, daily watch lists in the forum, weekly webinars, and helpful advice within the chatroom.

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