During the market’s recent pullback, I noticed: 1) There wasn’t heavy distribution 2) The major indexes held their key moving averages and 3) The true market leaders held their key levels. I view these developments as positive and they are keeping me bullish over the near-term. Many people are wondering why the recent drop happened? I wouldn’t be so concerned with the reasons. My honest opinion is that it was the market’s way of shaking out some of the recent excessive bullishness and keeping the bulls in check. Shorter-term, I am looking for some upside into next week, which is a regular cycle options expiration week (third Friday of every month). Regular cycle OpEx week tends to trend to the upside.

During this recent pullback, I increased my investment levels from 50% to approximately 85% invested for my clients. Besides the stocks I own, I took approximately a 35% position in the Nasdaq-100 ETF (QQQ) to give me broad exposure. If we see some upside over the next week, I will look to reduce again ahead of the end of the quarter. Quarter end tends to see higher volatility and portfolio re-balancing. As always, know your own timeframe. This shorter-term tactical trading doesn’t work for everyone. If you can’t watch the market closely, one strategy is to take smaller positions and give stocks room. I still think many stocks need time to base and to provide better entry points, but many offered pullback buys recently. I discuss ways to enter stocks on pullbacks in this video. One strategy is to start with 1/3 or 1/2 of your normal and add on strength. If they breakdown, you will know quickly and you can stop yourself out with hopefully a minimal loss. Good luck for the remainder of the week!

Unusual Option Activity:
9/9/20 DocuSign (DOCU) with 1000 January $230 calls bought $28.50 to $28.60
9/9/20 Facebook (FB) opening sale earlier 1000 March $225 puts at $14.05
9/9/20 Microsoft (MSFT) with September 2021 $180 puts being sold to open today 3000X near $16.50
9/9/20 Tesla (TSLA) buyer of 1500 January 2022 $450 calls for $99.74, spread with the $1000 calls sold $38.74
9/9/20 TelaDoc (TDOC) bullish put sales today, the April $195 being sold to open 300X and the $180 puts 250X
9/9/20 Advanced Micro Devices (AMD) with 2000 June 20221 $40 deep ITM calls being bought today near $43.5
9/9/20 Alibaba (BABA) seller 2000 Jan $250 puts $17.20 bid
9/9/20 Workday (WDAY) trading 915 December $210 calls early where 900 bought to open yesterday
9/9/20 Apple (AAPL) sale of 2000 March $107.50 puts $10.50 bid
9/9/20 Tesla (TSLA) ITM Sep. 25th (W) $330 calls with some size lot buys up to 1250X for near $7M
9/8/20 Workday (WDAY) afternoon buyer 900 December $210 calls $22.59 for around $2M
9/8/20 DocuSign (DOCU) large buy 4000 October $210 calls to open up to $22
9/8/20 Salesforce (CRM) afternoon buys of 300 December $250 calls and 700 December $270 calls to open
9/8/20 Salesforce (CRM) opening sales of 2000 October $210 puts $3.65
9/8/20 Tesla (TSLA) down 17% and March $470 calls with 7000X opening in the first thirty minutes for over $40M, adjusting June 2021 $550 calls that opened 9/1

Topics covered:
1) 0:00 Announcements
2) 1:05 Market Commentary and Index Review (Nasdaq Composite, S&P 500, Russell 2000)
3) 9:30 Discussion on Pullback Buys and Focus List – TSLA, AMZN, MSFT, NVDA, AAPL, Z, QQQ (ETF)
4) 16:50 Stock Review – Mega Caps: CRM, FB, GOOGL, NFLX
5) 18:00 Stock Review – Software: NOW, VEEV, CRWD, FVRR, DDOG, APPN, ZM, APPS
6) 22:50 Stock Review – Housing: MTH, LEN, CCS, LGIH, XHB (ETF), ITB (ETF)
7) 24:45 Stock Review – General Ideas/Commentary: AAWW, CRNC, DKNG, PENN, BABA, JD, TSM, NEM, REGI, MRVL, WKHS, OTRK, EXPI, IRTC
8) 29:20 Current Setups – BLDR, CRWD, Z, APPS
9) 31:10 Conclusion/Summary