From now until month-end, I am still expecting a choppy range. Some factors that might add to volatility over the near-term include quarter-end portfolio re-balancing, the upcoming Jewish holiday, and the news cycle shifting more towards politics until earnings season starts again in October. I don’t see any significant or sustained downside and I am still very bullish into the election. Last week’s drop really shook out many market participants and led to many sentiment measures turning pretty bearish. Also, Merger Monday showed me that many companies are still considered undervalued.
So far this week, we have seen two days of accumulation on the Nasdaq Composite and today’s (Wednesday) reversal was on light volume. There’s still very little distribution and the major indexes continue to hold their 10-week moving averages. The Russell 2000 is also bouncing off support which is showing continued “risk appetite” in this market. I was also impressed by how many stocks have worked out well so far this week while the Mega Cap names are taking a rest. This constant sector rotation is normal and actually very healthy to see during bull markets. My feeling is that the Top 10 Nasdaq 100 stocks got “too hot” and they simply need time to shake out (or wear out) some of the weaker holders. I would still keep positions light until the end of the quarter, but the market’s overall price action is very constructive. If we do see a drop into quarter-end, I think it will present some great buying opportunities into the fourth quarter. Good luck for the remainder of the week!
Unusual Option Activity:
9/16/20 Amazon (AMZN) late day buyer of 700 February $4600 calls to open $39, $2.6M
9/16/20 Zillow (Z) large opening sale of 7,900 June 2021 $60 puts for $4.40
9/16/20 Spotify (SPOT) continues to rebound off day lows and late morning trades sold 980 September 2021 $190 puts to open $25.70 down to $24.40 bringing in over $2.2M in premium
9/16/20 Visa (V) with 500 June 2021 $185 puts sold to open today for $12.05
9/16/20 Zoom Video (ZM) buyers of 750 October 23rd (W) $407.50 calls for $34.65 to $35.60, over $2.5M
9/16/20 Z-Scaler (ZS) opening sale 600 October $130 puts $7.75 bid
9/16/20 Service-Now (NOW) another 800 January $470 calls active here where 900 opened yesterday
9/16/20 Cerence (CRNC) breaking out of a range yesterday and seeing 400 November $65 calls bought today between $3.40 and $4.15 as some September $50 calls adjust
9/16/20 Zillow (Z) hot name lately seeing 300 Oct. 30th (W) $89 ITM calls bought $12.50 to open, also 750 January $95 puts bought against the $70 puts
9/16/20 Amazon (AMZN) opening sale 140 Apr $2500 puts $123.15, over $1.7M
9/15/20 WorkDay (WDAY) seeing 1365 December $210 calls active here where 2,892 have been bought with accumulation recently
9/15/20 Service-Now (NOW) large morning buyer of 500 January $470 calls $47.80
9/15/20 Taiwan Semi (TSM) 1000 Oct 2nd (W) $87 calls bought here $1.17, name saw a lot of call buys yesterday
9/15/20 Taiwan Semi (TSM) also seeing 2000 January 2022 $100 calls bought near $9.35
9/15/20 Advanced Micro (AMD) day highs and 2750 March $77.50 ITM calls active today near $13 for over $3.9M
9/15/20 Cerence (CRNC) breakout potential with 750 Oct 70 OTM calls bought here
9/14/20 Taiwan Semi (TSM) with a late buy of 5000 Oct. 2nd (W) $86 calls for $1.18
9/14/20 NVIDIA (NVDA) November $550 calls active with buyers today $47 to $48 with 1900X trading, name that saw size November calls bought into weakness late last week
9/14/20 Pinterest (PINS) with 3000 January $45 calls opening $2.75 as January $25 calls adjust and take some profits off the table
9/14/20 DataDog (DDOG) strong day, Oct 90 calls have added 7000X to OI since 9/4, currently above 10K
9/14/20 Square (SQ) opening sellers active in June 2021 $115 puts today 1500X
9/14/20 Twilio (TWLO) seeing 925 January 2022 $180 puts sold to open collecting near $3M in premium
9/14/20 Albemarle (ALB) strong Materials chart with 200 October $90 calls bought ITM for $9.40 to open
9/14/20 Novocure (NVCR) 280 Mar $87.5 puts sold to open $10.60
9/14/20 Spotify (SPOT) into day lows buyer 500 January 2023 $370 calls for $42
9/14/20 Beyond-Meat (BYND) back near last week highs and 1000 November $140 calls bought in good sized lots $20.50 to $21.45
9/14/20 Beyond-Meat (BYND) also seeing long-term January 2023 $155 calls bought to open 1150X today $46.50 to $48
9/14/20 Tesla (TSLA) up 9% on the day now, Battery Event next week, and 1000 December $450 calls bought near $55 this morning, while March 2022 $550 calls with 1700X opening for over $20M as September 2021 $360 calls look to be adjusting
9/14/20 Technology ETF (XLK) maximum strike and time-frame January 2023 $130 calls with 1890X seeing opening action today for over $3M, mainly $13.65 to $14.35 range
9/14/20 Marvell Tech (MRVL) a Semi not far off highs, 2000 Oct $42 calls w/ buyers
9/14/20 Advanced Micro (AMD) with nearly 5000 Oct. 2nd (W) $84 calls opening near $1.87
Topics covered:
1) 0:00 Announcements
2) 0:35 Market Commentary
3) 6:35 Index Review (Nasdaq Composite, S&P 500, Russell 2000)
4) 10:10 Stock Review – Mega Caps: AMZN, MSFT, GOOGL, NFLX, PYPL, TSLA, FB, CRM, AAPL, NVDA, ADBE
5) 15:10 Stock Review – Software: COUP, RNG, DOCU, SHOP, FVRR, APPS, CRWD, ZM, NOW
6) 17:40 Stock Review – Housing: MTH, CCS, BLDR, LEN, LGIH, XHB (ETF), ITB (ETF)
7) 29:00 Stock Review – General Ideas/Commentary: AAWW, CHRW, ALB, DKNG, PENN, CRNC, SRGY, REGI, WKHS, NVCR, Z, SE, BYND, EAT, HZNP
8) 26:10 Stock Review – Medical/Genomics: TXG, NVTA, GH, ADPT, PSNL, OTRK, ARKG (ETF)
9) 30:25 Current Setups – XHB, ITB, DDOG, CRWD, VSTO
10) 32:00 Conclusion/Summary