Markets tumbled on Tuesday, with the S&P losing 1.37% in an ugly session. Asia markets closed lower overnight while Europe indexes have reversed opening losses to trade higher. U.S. futures are pointing to a bounce, the Dollar, Yields, and Oil are lower while Gold is flat.
And here is my rant from yesterday if you missed it: https://www.optionmillionaires.com/jbs-morning-rant-october-3rd-2023/
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-332/
It was an ugly session for markets yesterday, finding pressure at 10am after the JOLTS report. Once again it 'JOLTed' the market. The report showed the biggest gain in Job openings in over a year, and this is on top of the August report that had seen the biggest increase in Job openings on record. Data that is likely going to give more ammo to the Fed to raise rates at least one more time this year at the last two Fed meetings. The SPY came down to $420.18 at the 2pm hour before bouncing to close at $421.59. It also came down to $418.80 overnight and has since recouped those losses. This morning the ADP report for September showed lower than expected job gains - conflicting data - got to love it (sense my sarcasm). Futures pushed higher after the data. As I said on the rant yesterday, think we need a flush or signs of capitulation before a sustained bounce can happen. The start of earnings season next week could also provide a catalyst. My short-term target on the SPY s $415-416, once that comes, will re-evaluate. Over 80% of the companies in the S&P are trading under their 50dma and the S&P is back under 20% of gains since its October lows. Signs that maybe the bottom is near:
I closed the last of my IWM puts yesterday for a decent gain. They had come back to life and I did not want to lose the profits again on any bounce. Still eying IWM for some downside but may look at TZA calls instead this go around:
I added some DPZ puts yesterday:
Have to think some of these highly leveraged, debt laden companies, who need to kick the can down the road, are going to get caught with their pants down. DPZ reports next week so the premiums are expensive. If those premiums come down I may add some more strikes into next week. The gap from the UBER news looks like it may fill at some point:
LULU finally broke down, closing off over 4% on no new news to speak of. I'll likely continue to hold my puts while using the $375 area as a potential stop:
ULTA also fell yesterday and is back under that $400 handle. Still stuck in a downtrend and I may look to add some puts into next week if it fails to reclaim $400 today. Think $370s are coming soon:
As mentioned yesterday, also watching ORLY and AZO for potential puts. ORLY closed under its 200dma for the first time since June of 2022. Low $800s possible in the coming weeks:
AZO also closed under its 200dma. Could see $2300s soon:
Still holding the rest of my freebie Nov GLD puts and my JDST calls. Still think $1820 is coming soon on Gold so will likely hold both even on a bounce today:
WW finally succumbed to the market pressure, closing off over 3% yesterday. Story hasn't changed and still like it for much higher here once the dust settles:
If markets hold the bounce today, will be eyeing ROKU and NFLX calls. Also have my eyes on LLY, the stock is nearly $80 off its September highs:
And here is what I am watching today: ROKU, NFLX, LLY, ORLY, AZO, DZ, DUST, NOW, MDB, SITE, MELI, WW, IWM, ADBE, AVGO, WIX, ALGN, SPOT, OKTA, GNRC, VKTX, LRCX, CMG, QQQ, and TEAM.
Let's have a great day!
-JB