My latest Yahoo Finance article: https://finance.yahoo.com/news/why-stock-market-higher-into-presidential-election-152850993.html
Since the market bottom in late March/early April, the Nasdaq Composite has shown a pattern of grinding higher for 8-12 days, and then pulling back to its 21-day EMA. The pullbacks are usually swift, 1-3 day drops of approximately 5-8%. The reason I mention this now is that the Nasdaq is getting a little extended short-term. If we continue to see strength into the end of this week, I will be reducing my exposure into next week. I already started by selling my QQQ position into the strength on Tuesday. Also, next week is the week after regular cycle expiration, which tends to be weak. I am also expecting some end of the month profit taking next week. As always, I can’t stress this enough: KNOW YOUR TIMEFRAME! My type of tactical trading is not for everyone. If you are a trader, one suggestion is to lighten up your exposure or keep your position size small in case we get a pullback next week. If you’re a longer-term investor, then be patient and stick with the trend because the major averages are still in strong uptrends. The best way to summarize my view is: expecting a minor pullback short-term, but bullish into the election for the reasons outlined in my Yahoo Finance article above. If we do see a pullback, my focus will mostly be on the Mega Cap stocks because they are holding up the best. Good luck for the remainder of this week!
Unusual Option Activity:
8/19/20 Facebook (FB) 2900 Dec. $265/$290 call spreads bought today
8/19/20 Visa (V) strong trading 11,000 next week $205 calls
8/19/20 Fastly (FSLY) seeing some sweep buys next week $85 calls up over 2500X here $1.85 to $1.95
8/19/20 Cerence (CRNC) with 500 October $60 calls bought around $4.00 to $4.25 as some August $50 calls roll out and up into strength
8/18/20 Amazon (AMZN) continuing large cap Tech call spread theme with 750 February $3300/$390 call spreads for around $17.5M
8/18/20 Shopify (SHOP) opening seller 440 June 2021 $800 puts today $106.50
8/18/20 Facebook (FB) with the February $265/$310 call spread bought 8000X for $16
8/18/20 Spotify (SPOT) seeing 700 Sep. 25th (W) $180 calls open deep ITM as August adjust out, a $5.2M position
8/18/20 Apple (AAPL) seeing 1650 June 2021 $460 at-the-money puts sold to open today down to $62.10 collecting $10M premium
8/18/20 Google (GOOG) buyer of the February $1540/$1800 call spreads 1500X for $97.50, big tech bullish positioning continues
8/18/20 Tesla (TSLA) action today seeing 1500 November $1500 calls with closing sales while 2000 each October $2000 and $1980 ITM puts being sold to open
8/17/20 Amazon (AMZN) also December $3180/$3490 call spreads 765X
8/17/20 Microsoft (MSFT) with 5,000 February $215/$255 call spreasd bought for $12.45
8/17/20 Tesla (TSLA) September 25th (W) $2000 calls trading 1200X with size buys midday $101.90 to $105.45
8/17/20 Facebook (FB) buyer 7500 July 2021 $270/$330 call spreads to open at $19.55
8/17/20 Adobe (ADBE) more large call spreads opening today with the February $455/$540 bought 3100X and the July $455/$600 bought 3100X to open
8/17/20 MasterCard (MA) buyers 2300 Sep. 4th (W) $340 calls today $3.80 to $3.95 to open
8/17/20 Salesforce (CRM) buyer of 11,000 February $200/$220 call spreads for $7.85 as size bullish spreads in large-cap tech continue
8/17/20 Shopify (SHOP) with 1635 next week $900 puts sold to open for $5.01
8/13/20 Zillow (Z) buyer 270 February $80 calls $11.75 offer. Zillow Group (ZG) with 1,500 February $80 calls bought up to $12.10
Topics covered:
1) 0:00 Announcements
2) 0:40 Market Commentary and Index Review (Nasdaq Composite, S&P 500, and Russell 2000)
3) 10:00 Stock Review – Mega Caps: AMZN, MSFT, ADBE, FB, GOOGL, AAPL, CRM
4) 13:05 Stock Review – Software: COUP, VEEV, DOCU, NOW, BAND, INOV, RNG, SPSC, FSLY
5) 16:25 Stock Review – General Ideas/Commentary: TSLA, NIO, PGNY, Z, CRL, DXCM, JD, BABA, PDD
6) 22:10 Current Setups – V, MA, ZM, SHOP
7) 24:50 Stock Review – Semiconductors: NVDA, AEIS, LRCX, TER, SMH (ETF)
8) 25:45 Conclusion/Summary