In the last MidWeek Video, I mentioned that I increased my investment levels in anticipation of a possible rally off the Nasdaq’s 50-day and into regular cycle options expiration next week. When the reversal occurred on Thursday 9/10, I sold my Nasdaq 100 ETF position and reduced my overall exposure. I sent an email on Thursday after the market close further explaining my reasoning.

From here, I think the next few weeks will require a great deal of discipline and patience. I feel we will see a choppy market over the next few weeks for the following reasons: 1) The upcoming Fed meeting on Wednesday 9/16 2) End of the quarter 60/40 portfolio re-balancing 3) Mutual fund position size adjustments 4) The upcoming Jewish holidays and 5) The news will shift from earnings to political and geopolitical nonsense. As I’ve mentioned before, some of my worst drawdowns have come at the end of the March, June, and September quarters and I’m doing my best to make improvements and lean towards a defensive posture during these periods. We could still see some upside this week but I don’t think it will be sustained.

As always, your decisions should be based on your own timeframe and your own investment objectives. If you are a trader, the discipline should include raising some cash, using lighter than normal positions, and doing less trading. If you are a longer-term investor, use the 10-week moving average as your guide. If any position decisively breaks below this level, a loss-cutting policy should be used. Right now, many Mega Caps and the major indexes are sitting right around their 10-weeks, so use caution and shift to a defensive posture until we get more clarity. I am by no means turning bearish. I simply think the market needs time to consolidate. I don’t see any significant downside because the Fed is on our side and sentiment will turn bearish VERY quickly. In fact, it’s already started to last week. Be patient, practice discipline, and wait for safer entry points. If you have any questions, you can ask them during the next webinar on Sunday, September 13th at 11AM EST. Enjoy the rest of your weekend!

Unusual Option Activity:
9/11/20 Crowd-Strike (CRWD) with 1435 June 2021 $105 puts sold to open near $13.85
9/11/20 Etsy (ETSY) buyer 750 March $130 OTM calls $15.50 to $15.75 after size March call buys yesterday
9/11/20 Alibaba (BABA) 2000 June 2021 $300 puts sold to open ITM for $48.55
9/11/20 Workday (WDAY) buyers of 280 March $230 calls for around $500K today after recent Dec. call buys
9/10/20 Spotify (SPOT) opening sale 150 Jan. 2022 $250 puts $56.20
9/10/20 Twitter (TWTR) buyer 1500 October $35 ITM calls $5.90 to $6
9/10/20 Etsy (ETSY) strong morning move and seeing 750 March $115 calls with buyers at $22.60+ and volume climbing now to over 1000
9/10/20 Netflix (NFLX) opening sale 150 March $500 puts at $68.70. NFLX also an opening sale 500 Jan. 2022 $380 puts for $45.80
9/10/20 Pinterest (PINS) size buys of 4250 February $37 calls $6.60 to $6.70

Topics covered:
1) 0:00 Announcements
2) 0:35 Update since Wednesday’s 9/9/20 MidWeek Video
3) 3:35 Market Commentary and Index Review (Nasdaq Composite, S&P 500, Russell 2000)
4) 17:50 Stock Review – Mega Caps: AMZN, MSFT, GOOGL, NFLX, PYPL, TSLA, FB, CRM, AAPL, NVDA, ADBE
5) 22:50 Stock Review – Software: COUP, RNG, DOCU, SHOP, FVRR, APPS, CRWD, ZM, NOW, WDAY
6) 27:10 Stock Review – Housing Related: MTH, CCS, BLDR, HD, LOW, LEN, XHB (ETF), ITB (ETF)
7) 28:45 General Ideas/Commentary: AAWW, CHRW, APD, ALB, DKNG, PENN, CRNC, CGRY, WKHS, NVCR, Z
8) 32:45 Stock Review – Medical Products/Services (Specifically Genomics): TXG, NVTA, GH, ADPT, PSNL, OTRK, IRTC, TWST, NEO, NTRA, CSTL, NARI, SWAV
9) 37:25 Current Setups – GH, Z, ALB
10) 38:10 Conclusion/Summary