Stocks finally put an end to its 4 week losing streak, with the S&P adding .48% after rallying 1.19% on Friday. Asia markets closed mixed overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a lower open while the Dollar, Yields, Oil, and Gold are all higher.
And here is my rant from Friday if you missed: https://www.optionmillionaires.com/jb-rant-october-6th-2023/
Markets rallied on Friday, reversing morning lows to close solidly in the green, despite a monster jobs report that caught everyone off guard. One would think that would give more ammo for the Fed to raise rates at their next meeting at the start of November, instead the market has lowered the probability of a rate hike this year down to 30%, while raising the odds of a hike at the Jan 2024 meeting to over 60%. The silver lining in the report was wage inflation decreased. Some think the strong jobs report was more of a function of folks working multiple part time jobs. And considering part-time work usually pays less, that would also result in lower wages. Time will tell. 3rd time was a charm at the $420 handle on the SPY and will be strong support if/when we get back down there. This weekend saw the surprise attack on Israel by Hamas. There is always tension there but hopefully this does not escalate. Futures are lower on the uncertainty while Gold/Oil are rising. You also have defense names rallying like NOC and LMT. Will certainly put the market to the test this week. We also have the start of Q3 earnings season, the Fed minutes, and CPI/PPI data. Still in the camp that there is a little more downside left. if markets do reverse today and find support this week, will be watching $432 as possible resistance:
Here is the current YTD performance:
And here are the implied moves for companies reporting earnings this week:
It was a great end to the week. LULU gapped lower on Friday to test $354. I used the move to close my puts out for over 200%. I was also able to close my DPZ puts for over 1,000%. Will likely stay away from LULU for now and possibly revisit on bounces.
DPZ closed off nearly 6% on Friday on no news to speak of. Think that WSJ article, coupled with the WMT CEO's comments, is weighing on Casual dining and fast food stocks. As mentioned, I was able to close my weekly puts out for over 1,000% and went and closed some of my Oct 20th puts out for nearly 200%. Will likely close the rest of my puts out before earnings and revisit. The stock closed under its 200dma on Friday for the first time since July, will use the $343 area as a possible stop. Think $320 or so can come before earnings:
I added more ULTA puts as well. Think a move into the low $370s is coming:
I added some MCD puts... finally. Think it has another $7-10 to go to the downside before a bounce. Will be quick to close the puts out on a break above $249 or so and revisit:
And lastly, I added some SHW puts. Think this debt story is not going anywhere anytime soon, and many of these high-leveraged/debt-laden companies will come into focus. SHW has over $11 bil in debt and pays over $400 mil a year just to service the debt. Not to mention, slowing home sales due to higher rates will slow demand down for renovations...ect. Think it can also test its 200dma this week at $243 and then possibly $235:
Gold is bouncing this morning with Geopolitical uncertainty being the catalyst. Still holding my freebies GLD puts and JDST calls. Still think $1820 comes.
The WSJ had a nice piece on WW over the weekend, and were able to get a quote from Oprah Winfrey that said her comments about Ozempic were, '...misconstrued and taken out of context...':
Her comments caused a 20% pull in WW, so would have to think it rallies today. It has been a bumpy ride between 10-11 so will likely continue to wait for the $12 break to add more strikes into 2024:
Still have my eyes on AZO and ORLY for puts, and watching ROKU, NFLX, and TWLO for some calls if the market reverses this morning:
AZO for $2400:
And TWLO for $60+
And lastly, will be watching bank earnings this week but will be on the sidelines. BLK would be one I will be watching come Friday after they report for some possible spec positions:
And here is what I am watching today: TWLO, ROKU, NFLX, AZO, ULTA. DUST, GLD, TZA, ORLY, NFLX, LLY, NOW, MDB, SITE, MELI, WW, IWM, ADBE, AVGO, WIX, ALGN, SPOT, OKTA, GNRC, VKTX, LRCX, CMG, QQQ, BLKand TEAM.
Let's have a great day!
-JB