Markets closed mixed on Wednesday, with the S&P squeezing out a small gain while the Dow closed in the red in a volatile session. Asia markets closed mostly lower overnight while Europe indexes are mixed this morning. U.S. futures are pointing to a flat open as I write this, the Dollar and Oil are lower while Yields and Gold are higher.
And here is my rant from yesterday if you missed it: https://www.optionmillionaires.com/jbs-afternoon-rant-september-27th-2023/
Stocks opened higher on Wednesday, but gave it all back and then some into the afternoon. At times the S&P was off over 1%. The market hit lows exactly at 2:30pm and then it was as if someone hit a button. The SPY ramped from $422 to $426 in less than 10 minutes on no news or catalyst and was able to hold the gains into close. It bring back a bit of memories of the PPT, where a magical hand would come in right when markets looked the weakest and squeeze, causing pain to anyone in puts or short. Still think a test of $415 or so is coming on the SPY, but will be a bumpy ride. After the close today, Powell is hosting a zoom conference with Teachers across the country. Not sure that will move markets much but something to be aware of. Maybe some chop here today and then a pull back to $422 or so into the weekend:
IWM closed up nearly 1% yesterday. It felt like a relief rally where oversold names found some bounces. Still think $170 or so is coming soon. As mentioned on the Rant, the small-caps are red on the year and in correction territory from August levels. That $177 handle should be some resistance today on strength:
WW received an upgrade yesterday and the stock rallied over 7%. Craig Hallum had a sell rating and $4 price target... now it is a hold rating and $10 price target. Nothing like changing your price target 150% after being wrong. Either way, just another analyst throwing in the towel on their bear case for WW. Hopefully today is the day WW finds some continuation and can work on that $12 handle into the weekend. If that $12 handle falls, I will add some more 2024 strikes:
ULTA recouped some of Tuesdays losses. I locked more of my puts in for over 200% and will now ride the rest for the possible move to $380 and below in the coming days. I will use the $398-399 handle as a potential stop:
LULU closed slightly in the red yesterday and under that $380 handle. After the close LULU and PTON announced a 5 year agreement. They had a spat over PTON's apparel line and now will work together. LULU will shut down its mirror product/service, transition those folks to PTON, and PTON will be able to sell LULU licensed apparel. I think it is great for PTON and horrible for LULU but of course I am looking at it thru a lens of someone who has LULU puts. I think it dilutes LULU's brand name, will hurt margins, and the Mirror fiasco will hurt the bottom line. Not to mention some may wonder if PTON is going to be acquired by LULU now. I may look for some puts into next week if LULU is red at the open:
I am back in GLD puts. If you don't know my thought process on it, listen to the rant if you get a chance. Gold broke under $1900 for the first time since March:
https://x.com/OMillionaires/status/1707052869633913197?s=20
Think $1850 or so is next. I may look to add some later dated puts as well further out into October or even November:
13 years of annotations here:
And later out using weekly:
DUST or JDST are also on the radar. If Gold hits $1850 DUST will be $18-20+:
Still eyeing possible spec puts in MDB, LRCX, NVDA, NOW, and ADBE today if markets fail to hold the morning levels. If we get another afternoon surge, will be eyeing ROKU, NFLX, and possibly SPOT(downgraded today). And still have my eyes on SITE and LLY calls. LLY looks really tight here and set for a large move, likely to the upside:
And here is what I am watching : DUST, JDST, GLD, GLL, SITE, LLY, MELI, ROKU, NFLX, WW, IWM, MDB, LRCX, NVDA, NOW, ADBE, AVGO, WIX, AMD, ALGN, SPOT, OKTA, GNRC, VKTX, LRCX, NVDA, CMG, QQQ, and TEAM.
Let's have a great day!
-JB