Topics covered:
1) 0:00 Announcements
2) 1:00 Market Commentary and Index Review (Nasdaq Composite, S&P 500, and Russell 2000)
3) 13:40 Stock Review – Software: IGV (ETF), BILL, DDOG, ZS, NET, DOCU, DOMO, DT, CVLT, VEEV
4) 18:00 Stock Review – Mega Caps: AMZN, AAPL, GOOGL, FB, MSFT, ADBE, NFLX, PYPL, SQ, SHOP, TSLA, QQQ (ETF)
5) 21:00 Stock Review – Semiconductors: SMH (ETF), AMAT, LRCX, ASML, CAMT, HIMX
6) 23:00 Stock Review – Medical Products: ALGN, INMD, CUTR, DXCM
7) 24:15 Stock Review – Watch List/General Ideas/Commentary: ROKU, AXON, LULU, ALNY, ALB, NTRA, ORMP
8) 27:30 Setups: CRWD, TEAM, WING, ASAN, NKTX
9) 31:30 Conclusion/Summary

Market Summary:
The weakness in Small and Mid Cap stocks brought down the overall market last week and into Monday of this week. I mentioned to stay defensive but don’t get overly bearish because there were still many positives in the market. 1) The Nasdaq Composite held its 10-week moving average on Monday 2) The S&P 500 held its 50-day moving average on Monday 3) The Mega Caps and many Software names were still acting very well 4) Many sentiment measures were getting extremely bearish.

After Monday’s decline, the market rebounded strongly and continued to show its incredible resilience. In this video, I explain that half of me wants to say that the S&P 500 will not correct more than 3-4% this year, and it could be a low volatility year like 2017 (when the market didn’t see a correction of greater than 3%). Why do I feel this way? Because of the insane liquidity being provided by the global central banks. Also, the Fed is neither raising rates nor tapering their bond buying any time soon, and sentiment gets extremely bearish on any little dip. The problem with this statement is that 1) It’s not responsible and 2) Even when the S&P drops 3-4%, the Nasdaq Composite drops 5-10%, and the average growth stock corrects 10-30%. In other words, you still have to manage risk.

So, I have to default to the other half me which is to be responsible and protect members when potential warning signs show up, just in case these minor pullbacks turn into bigger corrections. Also, I will always do my best to interpret the market’s price action but please keep in mind my perspective. I actively manage money for clients and I have to get defensive and raise some cash when warning signs show up. If you only trade for yourself, you can make different decisions based on your own timeframe and risk tolerance.

Of course, the big question is: Is this correction over? Of course, no one knows, but it’s nice to see the major averages hold key levels of institutional support. I will continue to monitor things on a day-by-day basis, and I would still like to see the IWM and MDY regain their 50-day moving averages. In the meantime, the best we can do is stay exposed to the strongest stocks out there, get strong entry points, and manage risk if any position significantly breaks down. I was 50% invested coming into this week, and I increased my levels to approximately 70% invested. I still want to have some cash in case we get some backing and filling over the near term. Good luck for the remainder of the week!

Unusual Option Activity
7/21/21 ASML Holding (ASML) with 500 January $670 puts sold to open today for $44.30 after earnings, sizable buyback announcement
7/21/21 Z-Scaler (ZS) buyer 150 November $230 calls $21.55 offer
7/21/21 DocuSign (DOCU) with 1000 March $300 calls being bought today from $39.50 to $41
7/21/21 Apple (AAPL) opening sale 1350 March 2022 $120 puts $4.50
7/21/21 Western Digital (WDC) with 1000 August $68 calls bought $2.10 today into early weakness
7/21/21 Western Digital (WDC) also with 1000 September $65 calls bought $4.40
7/21/21 MasterCard (MA) buyer 2000 October $375 calls to open $19.30 to $20.75
7/21/21 Wynn Resorts (WYNN) with buyers of 675 March $120 calls $10.20
7/21/21 Netflix (NFLX) with 2000 October $510 puts sold to open $26.95 this afternoon as September $515 adjust
7/21/21 Snowflake (SNOW) bullish strategy sells 600 October $230 puts for $10.50 and buys the $270/$330 call spreads for $14
7/21/21 Biontech (BNTX) buyers of 400 September $290 calls for $17.30 to $17.40
7/20/21 Z-Scaler (ZS) buyer of 200 February $220 calls $32.35 to $33.50
7/20/21 Apple (AAPL) opening sellers of 4000 Aug. 6th (W) $144 puts $3.90 bid, earnings 7-27
7/20/21 Taiwan Semi (TSM) with near 3,000 December $115 puts sold to open for $7.80 to $7.70
7/20/21 Union Pacific (UNP) large opening sale of 1000 January 2023 $205 puts for $25.60, earnings on 7-22
7/20/21 Moderna (MRNA) buyers of 1,450 October $340 calls for $40.25 to $43 to open
7/20/21 Biontech (BNTX) with 1200 August $200 puts sold to open near $5
7/20/21 JP Morgan (JPM) opening sale 10,000 September $135 puts $1.73
7/20/21 SM Energy (SM) with buyers of 1500 August $20 calls for $1.60
7/19/21 Activision (ATVI) size late day buyers of 10,000 September $92.50 calls $3.60 to $3.85
7/19/21 Oracle (ORCL) with 1,600 January 2023 $77.5 calls opening for $16.18, adjusting the June 2022 $75 calls
7/19/21 Applied Materials (AMAT) with 750 December $120 puts sold to open down to $9
7/19/21 Adobe (ADBE) buyer 2700 August $650 calls $3.70
7/19/21 Digital Ocean (DOCN) buyer of 1000 August $45 calls for $6
7/19/21 Nvidia (NVDA) with 300 September 2022 $740 calls bought today from $131 to $138, over $4M
7/19/21 Nvidia (NVDA) also with 1000 October $810 calls bought for $39.50
7/19/21 Apple (AAPL) with 4,000 August 6th (W) $142 calls being bought for $4.54, spread with the $155 calls ahead of 7-27 earnings
7/19/21 Diamondback Energy (FANG) buyer 1000 August $85 calls $2.40 offer
7/19/21 Wynn Resorts (WYNN) with 400 March $97.50 puts sold to open $11.30
7/19/21 Peloton (PTON) buyers active for 1,475 October $140 calls for $4.50 to $6
7/19/21 Semiconductor ETF (SMH) opening sale 2000 September $240 puts for $8.40
7/19/21 Tesla (TSLA) seeing 1500 Aug. 6th (W) $720 calls bought $7.50 offer, buyers of 1500 Aug. 13th (W) $750 calls up to $5.95 offer sweeps, and 2300 June 2023 $850/$950 call spreads buying
7/19/21 MasterCard (MA) with 1750 September $360 calls bought for $19.35 to $19.50, spread with the $400 calls that looks to be adjusting back