Right now, I could discuss many reasons to be bullish and other reasons to be cautious. Whenever there are mixed signals like this, I’m always going to lean towards the defensive side because I want to do my best to protect people. In other words, I would rather be safe than sorry. The biggest positive right now is that the major indexes are still above their key moving averages and there’s very little distribution. In fact, Friday 7/24 was the lightest volume day of the year for the S&P 500, the Russell 2000, the S&P MidCap 400, and the second lightest for the Dow Jones Industrial Average. This is a good sign because it shows that institutions are not selling heavily. (However, one thing to watch are the 3 distributions days building up on the Nasdaq Composite). Another positive is the liquidity being pumped into the system by the Fed. They have a meeting this week with a monetary policy announcement on Wed 7/29 at 2PM EST, but I’m not looking for anything major to come out of this meeting.

The biggest negative right now is that there are very few quality, safe entry-point setups. Many of the leaders are still in strong uptrends but they simply need time to digest their recent gains and provide better entries. Another negative is the upcoming seasonality as August and September are traditionally two of the weaker months of the year. At this point, any decisions you make should be based your own timeframe and investment objectives. For traders, there’s nothing wrong with taking smaller positions and cutting losses on some lagging stocks. That way, in case we see more selling, you won’t get hit as bad and you will also have cash to put to work at key support levels. As always, I will take this day by day and wait until we get a clearer picture. See you Sunday at 7PM EST for the next Stock Screening Webinar!

Unusual Option Activity:
7/24/20 Shopify (SHOP) the October $820 ITM calls being bought 500X today for $167.57 to $168.85, over $8.4M
7/24/20 DocuSign (DOCU) IV rising this afternoon with another 2,750 September $195 calls trading, buyer flow from $16.80 to $17.60, looks to add to large buys from last week
7/24/20 Zillow (Z) buyers in the July 31st (W) $67 calls today around 800X
7/24/20 Twilio (TWLO) 200 Jan $240 puts sold to open $39.40 to $39
7/23/20 Apple (AAPL) morning trades of note include 5000 January $450 calls at $10.15 in a buy-write, 1000 September 2021 $540 calls bought $11.50, and 1000 January $405 calls bought $22.85 to $24.06
7/23/20 Spotify (SPOT) with 500 more January 2022 $330 calls bought near $59.50 where 500 opened yesterday
7/23/20 Staar Surgical (STAA) with 1000 August $47 puts sold to open

Topics covered:
1) 0:00 Announcements
2) 0:30 Market Commentary
3) 4:40 Index Review – Nasdaq Composite, S&P 500, Russell 2000, Dow Jones Industrial Average, S&P MidCap 400
4) 17:30 Stock Review – Mega Cap Focus List: AMZN, MSFT, NFLX, ADBE,
5) 22:10 Stock Review – Software Focus List: DOCU, COUP, AYX, VEEV, OKTA, DDOG, CRWD, FSLY, TWLO, NOW, (forgot to discuss ZS, ZM)
6) 25:40 Stock Review – Artificial Intelligence Focus List: SDGR, BTAI, DT, ICAD
7) 27:50 Stock Review – Biotech/Medical Products: SGEN, VRTX, DXCM, STAA, ADVM
8) 29:35 Stock Review – Others: NVDA, Z, CHGG, TSLA, SHOP, BYND
9) 32:30 Stock Review – General Comments: ARCT, IDYA, PENN, STMP, BABA, BAND, DHI, MTH
10) 35:35 Current Setups – NARI, Z, NVDA
11) 36:50 Conclusion/Summary