Topics covered:
1) 0:00 Announcements
2) 1:00 Market Commentary and Index Review (Nasdaq Composite, S&P 500, and Russell 2000)
4) 11:00 Stock Review – Semiconductors: SMH (ETF), AMAT, LRCX, ASML, KLAC
5) 13:05 Stock Review – Medical Products: ALGN, STAA, SWAV, NARI, INMD
6) 16:00 Stock Review – Payments Stocks: MA, V, PYPL, SQ
7) 16:40 Stock Review – Financials: XLF (ETF), GS, MS, EVR, COWN, RILY, JEF
8) 17:45 Stock Review – Energy: XLE (ETF), OIH (ETF), BCEI, EOG, XEC
9) 19:30 Stock Review – Watch List/General Ideas/Commentary: XTN (ETF), UPS, FDX, XRT (ETF), SLX (ETF), DE, MOS, FND, HYRE
10) 22:20 Setups: FANG
11) 23:45 Conclusion/Summary

Market Summary:
About two months ago, I discussed how there were two different markets going on. The growth sectors (as seen in the Nasdaq Composite) were going through a correction, while the value sectors (as seen in the S&P 500 and Dow Jones) were in strong uptrends. In early April, growth started to participate again, but over the past two weeks, the price action in growth has returned to being weak. There are two questions from here: 1) How do we interpret this price action/what can we expect from here? 2) How do we deal with this in our portfolios?

1) Of course, we would like everything to move in sync, but there will be times when the market will diverge. We just have to accept it and adjust as best as possible. From here, I see two scenarios: either growth stabilizes and starts to participate again, or the weakness in growth brings down the rest of the market. Of course, this divergence can go on for a while, but eventually, one of the two scenarios usually happens. For example, this week, the S&P 500 was up +1.23% but the Nasdaq Composite was down -1.51%. Again, this can go on for a while, but eventually something has to give, which is why I am still being patient until we see how this plays out.

2) Regarding the second question, I’ve discussed for the past two months using a blend of ETFs and individual stocks to give you exposure to the sectors that are performing better than growth and Tech. One of the biggest frustrations I am hearing from traders is that their growth stocks are struggling while the indexes are grinding higher. Like Paul Tudor Jones says, we have to learn to adapt. Rather than getting frustrated, make some adjustments and own some strong sector ETFs (such as XRT, XLF, XLE, OIH, SLX, XTN) until growth participates again.

Overall, I still suggest being defensive until we get a clearer picture. I am not bearish, just defensive in the growth area until the price action improves. Using lighter than normal positions helps to minimize frustration, and having a little patience will also help. If you have any questions or would like me to discuss stocks not covered in this video, you can ask them during the next webinar which will be Sunday, May 9th at 7PM EST. Thank you and enjoy the rest of your weekend!

Unusual Option Activity
5/7/21 S&P 500 ETF (SPY) with 25,000 August $440/$380 bull risk reversals opening for a $0.43 net credit
5/7/21 S&P 500 ETF (SPY) also with over 15,000 September 2022 $550 calls bought between $1.94 and $1.97
5/7/21 American Express (AXP) with 400 September $160 calls bought $8.65/$8.70
5/7/21 US Steel (X) buyer of 1000 June 4th (W) $23.50 calls for $4.75 to $4.90
5/7/21 Arcelor Mittal (MT) the September $36 calls bought 2400X for $2.30 to $2.35, some June calls rolling up
5/7/21 Nvidia (NVDA) buyer 1000 July $650 calls $17.70 to $18.50 to open, earnings not until 5-26
5/6/21 MasterCard (MA) size buyer of 1750 July $380 calls for $12.10 to $12.50 today
5/6/21 Inmode (INMD) with 400 June $80 calls bought for $5 today into the 50-MA
5/6/21 Boeing (BA) buyer of 2000 July $260/$275 call spreads this morning for $1.85
5/6/21 Taiwan Semi (TSM) buyer of 4000 May $122 calls for $0.65, follows 14,000 of the $121 calls bought recently
5/6/21 Applied Materials (AMAT) with 1000 May $131 calls bought today for $4.15 to $4.35, follows the size May $138 calls earlier this week