As I mentioned in the MidWeek video, when there are mixed signals in the market, I will usually lean towards being cautious and being patient until we get a clearer picture. The mixed signals right now is that many growth leaders dropped quickly on Monday (down 5-10%) but the major averages are all still above their key support levels. Towards the end of the week, it was a positive sign that we didn’t see any follow through selling in the leaders, and many of them have stabilized so far. We’re not out of the woods yet and I think the next few days will give us an even clearer picture. One thing I like to do during times when the leaders pull back is to pay attention to relative strength. In other words, evaluate which stocks held their 10-days, 21-day, 50-day, or broke below this key level. In this video, I go through all the leaders from the 6/17/20 video and quickly break down each Daily and Weekly chart.

Overall, the biggest positives right now are: Still very little distribution, all the major indexes are still above their key moving averages, and other sectors are showing up telling me this rally could be broadening out. As I’ve mentioned in recent videos, it’s possible we could see the Nasdaq Composite digest its recent gains while the S&P 500 and Dow Jones Industrial Average outperform over the near-term. This possible continuous sector rotation makes it difficult to short the averages for any sustained down move. The current negatives include seasonality (as we sometimes see profit taking towards the second half of the month), the excessive equity call buying, and that many leaders need time to digest their recent gains. Again, these leaders are not broken by any means, they simply need some time which is why knowing your timeframe is so important and getting a strong entry point is also important. See you on Sunday at 11AM EST for the next Stock Screening Webinar!

Link to Mike Webster’s Weekend Update: https://www.investors.com/market-trend/stock-market-update-the-raging-bull-vacation/

Unusual Option Activity:
7/17/20 Shopify (SHOP) spread selling 305 January $790 puts to buy the $940/$1200 call spreads
7/17/20 Schrodinger (SDGR) bullish action selling 1700 August $75 puts to open $5.45 today
7/17/20 OKTA 100 Aug 28th (W) $180 calls open $31.04 as July adjusts
7/17/20 Shopify (SHOP) 675 Oct 800/770 bull put spreads opening
7/17/20 Twilio (TWLO) with 425 July 31st (W) $227.50 calls opening $11.20
7/17/20 Zillow (Z) spread sells 1200 November $45 puts $2.96 and buys the $60/$75 call ratio spread 2000X2600
7/17/20 Zillow (Z) also with 1000 July 31st (W) $65 calls opening to $2.20
7/17/20 DocuSign (DOCU) with 450 December $200 ITM puts being sold to open $35.60 to $35
7/17/20 Docusign (DOCU) bullish action continues, large buys of 2945 September $195 calls $18.70 to $19.40
7/17/20 Regeneron (REGN) aggressive buyer 200 Aug. 14th (W) $645 calls $29.40, earnings 8-5
7/16/20 Lemonade (LMND) with 700 September $105 calls bought today between $3.25 and $3.90, recent issue that is consolidating in a narrow range after a strong debut. The company announced yesterday a new venture into pet insurance
7/16/20 Netflix (NFLX) buyer here for 630 January 2022 $530 calls $125.80, $8M
7/16/20 Mongo-Db (MDB) with 495 September 2022 $350 calls bought today from $23.80 to $25.30, max strike and max timeframe
7/16/20 Chegg (CHGG) seeing some July $65 calls bought in early May close and roll out to buy 575 September $80 calls for $4.10
7/15/20 Regeneron (REGN) bullish flows with buyers of 150 Aug. 28th (W) $635 calls and 190 February $740 calls

Topics covered:
1) 0:00 Announcements
2) 0:35 Market Commentary
3) 5:20 Index Review – Nasdaq Composite, S&P 500, Russell 2000, Dow Jones Industrial Average
4) 15:10 Stock Review – Mega Cap Focus List: AMZN, MSFT, NFLX, ADBE,
5) 21:00 Stock Review – Software Focus List: DOCU, COUP, AYX, VEEV, OKTA, DDOG, CRWD, FSLY, TWLO, NOW, ZS, ZM
6) 27:10 Stock Review – Artificial Intelligence Focus List: SDGR, BTAI, ICAD, DT
7) 30:00 Stock Review – Biotech/Medical Products: SGEN, VRTX, DXCM, STAA, ADVM
8) 32:00 Stock Review – Others: NVDA, Z, CHGG, TSLA, SHOP, BYND
9) 34:30 Stock Review – General Comments: APPS, CELH, CRNC, STMP, IDYA, BL, AKAM, CTXS, IDXX, REGN, SFM, QRVO, SWKS, MKSI, UCTT, SMH, TXAC
10) 41:35 Current Setups – Z, IDYA, AKAM, SWKS, VRTX
11) 41:55 Conclusion/Summary