Markets closed higher to start the week, with the S&P adding .40% in a choppy trade. Asia stocks fell overnight while Europe indexes are mostly in the red this morning. U.S. futures are pointing to a lower open, the dollar is higher while Yields, Oil, and Gold are all lower.
Here is my rant from yesterday if you missed it: https://www.optionmillionaires.com/jbs-noon-rant-september-25th-2023/
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-326/
It was another choppy session on Monday, with stocks reversing morning losses to turn higher only to reverse course back into the red by 3pm. A last hour rally then pushed stocks to a high of session close. There was no catalyst to speak of for the bounce besides oversold conditions. Yields hit 16 years highs and the US dollar is at a 10 month high and will likely weigh on markets today. As I have been saying for the last week or two, not putting on my bear suit, just think the path of least resistance right now is to the downside. Almost feels like an anchor is tied to the market right now. Moody's came out with comments this morning around the potential Government shutdown, saying it would be bad for U.S. credit (duh). Either way, they still have a triple A rating for for the US debt. Another downgrade and things would get nasty, so hopefully those comments are not a precursor to that anytime soon. The SPY tested $428.72 yesterday morning, would want to see that hold today on weakness:
As I discussed on yesterdays watchlist, I went and closed the last of my Sept IWM puts for over 400%. I will continue to hold the puts for next week as I think IWM is set to test the low $170s in the coming days. If there is any major reversal today or tomorrow, will use the $179 area as a potential stop:
I finally finished my DD piece on WW. It is part 1, as I will have another post giving some scenarios/potential outcomes with price targets:
WW continued its reversal from Friday, closing up over 6% on no news to speak of outside a reiteration of a Buy rating and $12.50 PT from Davidson. Likely will just continue to hold my calls but at some point I will start looking at more strikes into 2024:
ULTA traded down to $395 yesterday morning. I used the move to close some of my puts out for nearly 100% to cover costs. Will hold the rest for a possible move to $380 and below in the coming week or two:
ICPT finally was acquired this morning for $19 in cash from an Italian company. It was an over 82% premium and should help put a spark into VKTX, which closed down again yesterday for the 11th session in a row. Just a nasty chart:
I went and added LULU puts again as the stock broke its 200dma. It came down to test $378 before finding non-stop bids late in the afternoon to close at $384.33. I was looking to stop out on the puts at $382-382 but the premiums came down quite a bit and I still think it heads into the low $370s and possibly lower this week. May look to add more strikes today:
I almost added ROKU calls at the open yesterday, with the stock rallying out of the gate into the $71s only to watch it retrace all those gains to close in the $68s. Will likely sit on my hands on the call side on some names today and be patient. SITE and LLY are two more names I am adding to the bounce list for calls.
I will be on audio again between 11am and noon.
And here is what I am watching today: SITE, LLY, WW, IWM, ULTA, LULU, MDB, LRCX, NVDA, NOW, ADBE, AVGO, ROKU, NFLX, WIX, AMD, ALGN, SPOT, OKTA, GNRC, VKTX, GLD, GLL, LRCX, NVDA, CMG, QQQ, and TEAM.
Let's have a great day!
-JB