Markets closed mixed to start the week, with the S&P and Dow closing in the red while the Nasdaq squeezed out a gain. Asia markets also closed mixed overnight while Europe indexes are in the green this morning. U.S. futures are pointing to a bounce, the Dollar, Yields, and Oil are higher while Gold is lower.
And here is my rant from yesterday if you missed: https://www.optionmillionaires.com/jb-afternoon-rant-october-23rd-2023/
It was a rocky session or stocks on Monday, with markets testing lows 15 minutes after the open, posting a strong reversal to hit highs at 1pm, only to give back all the gains to close in the red. There is going to be a lot for the market to digest this week so I think this volatility is something to be expected until at least Thursday. Sometimes wild swings like we had on Monday(the SPY reversed rom $417 to $424) are the start of capitulation and a possible bottom. Will have to see how the next few days play out. The SPY came close to that $415-$416 target I have had for week - would want to see that tested before I revisit my downward bias. MSFT and GOOGL report after the close today and can certainly move markets, so something to watch. The SPY broke below the 200dma yesterday for the first time since March before bouncing back above $420. The SPY is down 5 sessions in a row, so maybe a bounce is in order today and possibly tomorrow and then a revisit of the $41Xs on the SPY into Wednesday and the end of the week:
I sat on my hands for most of the day. On one hand, I would love to look to add some calls for a bounce, but I am not convinced one will have lasting legs. ORLY was selling off yesterday on no news to speak of and almost seemed like a follow-thru from the AZO sell-off on Friday. I went and added a few puts for more downside. Like I have mentioned the past few weeks, these high-levered names don't look they are pricing in a 'higher for longer' environment. ORLY reports earnings after the bell tomorrow so will look to close some/all out before the end of the day, although I do think this can trade into the $700s in the coming months:
SHW reported a beat this morning and offered up some dicey guidance... either it will have positive or negative comps. They cited segments outside of residential for their beat. Sure enough the stock is gapping higher in the pre-market but I don't think this is a quarter that will be bought as it shows the business is still at risk. If it fails to hold $240 after the open, I will add to my puts to play for that eventual move into the $220s:
This AVAV uptrend remains strong. Only a matter of time before this is back over $120. Once it breaks that level, will add more calls:
Just a nasty melt for WW since hitting the $13 handle a few weeks ago. I actually may add some calls today If it holds green. Earnings are next week so will be the next catalyst:
Will continue to hold my LRCX as a hedge of sorts. That $575 level is looming and think an outsized downward move is in the cards:
SPOT reported a surprising beat and raise with a surprise profit. 99% of the bear case on SPOT is that they don't generate profits. Surprised it is trading down in the pre-market. I may look at some spec calls at the open to play for a move to $170+:
Last, but not least, is ALGN. The company has a history of some large post earnings moves. Just last Q it closed up over 13%. The stock has been pummeled since then, dropping over $140 on no really news to speak of. Maybe folks think GLP-1 is having an impact on teeth aligners? Joking aside, think there is an opportunity here so may look at some seriously spec lotto calls to play for a move to $340 or so full well knowing the calls will be bidless on any miss - they report tomorrow:
And here is what I am watching today: SPOT, ALGN, WW, SHW, AZO, LRCX, LULU, MDB, 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