Topics covered:
1) 0:00 Announcements
2) 0:40 Market Commentary and Index Review (Nasdaq Composite, S&P 500, and Russell 2000)
3) 7:10 Comments on three challenges for traders
4) 13:20 Stock Review – Semiconductors: SMH (ETF), AMAT, LRCX, ASML, CAMT, NVDA
5) 17:00 Stock Review – Software: BILL, DOCU, DOMO, DDOG, NET, ZS, CRWD, SHOP, ROKU
6) 19:10 Stock Review – Medical Products: ALGN, DXCM, CUTR, IQV, INMD
7) 20:30 Stock Review – Watch List/General Ideas/Commentary: SLX (ETF), XLE (ETF), OIH (ETF), CELH, GRWG, ZDGE, SNAP, ALB, ORMP, NKTX
8) 25:20 Conclusion/Summary

Market Summary:
As I discussed in recent videos, we’re in two different markets right now. Mega Cap stocks are in strong trends, but small and mid cap stocks are stalling and showing weakness. Whenever we see these divergences, one of two things happens: The weakness stabilizes and then resumes higher with the rest of the market, or the weakness continues and weighs down on the overall market. Unfortunately, the latter happened this week and the weakness in Small Caps (IWM) and Mid Caps (MDY) got worse. Conclusion: Stay defensive but don’t get overly bearish.

Whenever there are mixed signals in the market, I will always lean towards the defensive side until we get a clearer picture. By defensive, I mean minimizing new buys, being patient, raising some cash, keeping positions light, and cutting losses on any positions that are significantly breaking down below their 10-week moving averages. The reason I’m not encouraging to short this market or get overly bearish is that there are still plenty of positives. The Nasdaq Composite and S&P 500 are above their 10-week moving averages and sitting right near their 21-day EMAs. Mega Cap and Software stocks are holding up well. Also, the Equity put/call ratio spiked to its highest level since last November, showing a decent pick up in fear on Friday. It doesn’t mean conditions can’t get worse, but it also doesn’t mean we will bounce. It simply means the conditions for low risk long positions are not ideal right now, and it’s best to lean defensive until those conditions improve. The biggest negatives right now are the price action of Small and Mid Cap growth stocks, and the upcoming weak seasonality.

Again, stay open minded but lean defensive. In this video, I discuss some of the challenges members have emailed me about. The main one is staying disciplined when conditions are not in our favor. Enjoy the rest of your weekend and if you have any questions, you can ask them during the next webinar which will be Monday, July 19th at 7:30PM EST. Thank you!

Unusual Option Activity
7/16/21 Bill.com (BILL) 400 Aug $165 puts sold $4.80 to open
7/16/21 Nike (NKE) buyers active 5500 Aug. 6th (W) $165 calls
7/16/21 Align Tech (ALGN) buyer of 750 August $610 calls $40.40, a $3M position as the $600 calls adjust
7/16/21 Apple (AAPL) opening put sales active again, into morning lows with 5000 October $145 at $5.85 bid
7/16/21 Microsoft (MSFT) with 4000 October $285 calls bought $10.60 in early action, over $4.5M
7/16/21 Microsoft (MSFT) also seeing June 2022 $260 puts being sold to open 7000X $16.95 to $17.75 range
7/15/21 Facebook (FB) buyer 1500 September 2022 $460 OTM calls $14.40 in a large trade
7/15/21 Micron (MU) buyer of 500 December $60 calls for $18.90
7/15/21 Apple (AAPL) opening sale 1250 March 2022 $125 puts for $5.15
7/15/21 Crispr Therapeutics (CRSP) with 600 October $120 calls bought for $19.50, adjusting some July calls and follows the size bull spreads this week
7/15/21 Nasdaq 100 ETF (QQQ) big buy around 11:20am of 14,500 December $317 puts $7.93 to $7.97, around $13M
7/15/21 Visa (V) with 3,500 October $255 calls bought for $7.05, closing the $240 calls 2170X and adjusting into strength; earnings 7-27
7/15/21 Nvidia (NVDA) Oct $800 call buyers $43.85