Topics covered:
1) 0:00 Announcements
2) 0:15 Market Commentary and Index Review (Nasdaq Composite, S&P 500, and Russell 2000)
3) 8:00 FOCUS LIST: WING, HALO, CELH, PI
4) 10:45 Stock Review – Energy: XLE (ETF), XOP (ETF), OIH (ETF)
5) 11:40 Stock Review – Biotech: XBI (ETF), IBB (ETF), AMGN, VRTX, BIIB, AMLX, RVNC, AXSM, PRTA, FDMT, PCVX
6) 14:00 Stock Review – Medical Products: PODD, DXCM, TMDX, HRMY, PRCT
7) 15:35 Stock Review – Semiconductors: SMH (ETF), AEHR, ACLS, LSCC, ASML, KLAC
8) 18:25 Conclusion/Summary

Market Summary:
As you know, 90% of what I use to judge the health of the market is the price action of growth stocks. I want to see solid fundamental companies breaking out of strong technical bases on above average volume. The broader the number of sectors and the more stocks that participate, the better. Why is this important now? Because I’m still not seeing this on a consistent basis. In the past few weeks of videos when I have reviewed the positives and negatives in the market, one of the biggest negatives was the uninspiring price action in growth stocks. In this past weekend’s video, I mentioned that this price action was slightly improving, but unfortunately, we are now back to inconsistent and “washing machine” price action.

Why is this happening? Because of the Fed. Another negative I have consistently mentioned is let’s not forget the Fed is still raising rates and removing liquidity from the system. We started the year at 0% Fed funds rate. We are currently at 4% and their target rate is 5%. Even when they get to this terminal rate, it doesn’t mean to jump back in and aggressively get involved in the market. They will likely keep rates high to keep conditions restrictive. Let’s also not forget that their main objective is to tackle inflation. They are trying to kill demand by taking liquidity out of the system and keeping conditions unfavorable for a sustained uptrend in equities.

That doesn’t mean that the market has to go lower, but my conclusion is the same: be patient and remain defensive. By defensive, it means 1) Giving yourself a chance by trading high relative strength stocks. 2) Getting strong entry points. In other words, DO NOT chase extended stocks. 3) Using lighter than normal positions to deal with this higher volatility environment. 4) Making sure to cut losses when positions turn against you. My guideline is a decisive Friday close below the 10-week moving average. I recently increased my investment levels from approximately 30% to 50% invested. This week, I reduced exposure back down to 30%. As always, this is subject to change and I encourage members to develop their own investment plan. The main message today is to remain defensive and wait patiently for conditions to improve, specifically in growth stocks. Thank you and good luck for the remainder of the week.

Unusual Option Activity:
12/7/22 S&P 500 ETF (SPY) Jan $409 calls active with buyers midday with 12,000 trading near $4.96
12/7/22 Treasury ETF (TLT) buyer of 8000 Sep. 2023 $130 calls for $2.60 as May calls adjust
12/7/22 McDonald’s (MCD) buyers 1250 December 272.50 calls $3.95 to $4.10
12/7/22 Tesla (TSLA) buyer 1000 March $163.33 ITM calls $29.45
12/7/22 Disney (DIS) large opening seller of 1400 September $85 puts at $7.30
12/7/22 Chevron (CVX) opening seller 1500 Feb. $150 puts $2.65
12/7/22 Exxon (XOM) with 13,000 Dec. 30th (W) $95 puts bought $1.03 offer
12/7/22 Schlumberger (SLB) opening sales of 1600 May $70 calls at $1.08
12/7/22 Alnylam (ALNY) buyers active in January $250 calls 3000X $6 to $6.80
12/7/22 Prometheus Bio (RXDX) seeing 800 May $70 puts sold to open at $9.30
12/7/22 Snowflake (SNOW) sweep buyer 200 January 2025 $140 calls $53.70
12/7/22 Amazon (AMZN) with 870 deep ITM June 2024 $57 calls bought $39.45 for over $3.4M
12/7/22 Atlassian (TEAM) opening sale 400 June 100 puts for 12.23
12/6/22 Nasdaq 100 ETF (QQQ) large trade sells 2500 Dec. 2024 $250 puts to open $22.45 raising $5.5M in premium
12/6/22 Super Micro (SMCI) into dip with 2000 February $95 calls bought to open $4.40
12/6/22 Devon Energy (DVN) buyers of 850 Jan 2024 $50 puts at $6.85
12/6/22 Tidewater (TDW) unusual size buys 880 ITM July $25 calls $11 to $11.20
12/6/22 Rivian (RIVN) with 3000 January 2024 $45 calls sold to open 4.625 as June 60 adjust
12/6/22 Xpeng (XPEV) opening seller 4700 April $15 calls for 1.78
12/6/22 Pepsi (PEP) with 600 July $165 puts sold to open 4.90
12/6/22 Nike (NKE) opening seller of 5000 Jan $115 calls for $3.50
12/6/22 Albemarle (ALB) buyer of 600 March $330 calls at $5.80
12/6/22 Amazon (AMZN) seller of 2750 June 2024 $85 puts for 12.15
12/5/22 S&P 500 ETF (SPY) buyers into afternoon weakness 13,500 Jan. 13th (W) 410 calls $5.72 offer
12/5/22 Nasdaq 100 ETF (QQQ) Dec. 23rd (W) calls with 4000 of the $295 and 15,000 of the $300 calls being bought
12/5/22 Dow Jones ETF (DIA) with 5475 February $320 puts bought $4.45
12/5/22 Exxon (XOM) 3500 February 90 puts selling to open 1.25
12/5/22 Marathon Petro (MPC) opening seller 500 Jan. 13th (W) $117 puts for $5.35
12/5/22 Visa (V) large opening sale of 510 Feb $200 ITM calls for $22.60
12/5/22 United Health (UNH) with 1400 March $580 calls bought $11.90 to $12
12/5/22 Peabody Energy (BTU) buyer of 4000 Dec 30th $32 calls for $1.65, adjusting Dec $29 calls
12/5/22 Snowflake (SNOW) buyer 500 May $210 calls $6.40 to $6.70
12/5/22 Salesforce (CRM) with 4000 February 120 puts selling to open 4.30 bids
12/5/22 Microsoft (MSFT) with 6000 Dec. 23rd (W) $250 calls selling to open $8.35
12/5/22 Micron (MU) buyer 1500 April $57.50 calls $4.80