Articles on Unusual Options Activity:
https://www.cheddarflow.com/understanding-unusual-options-activity
https://marketrebellion.com/najarian-unusual-option-activity/

Topics covered:
1) 0:00 Announcements
2) 0:15 Market Commentary and Index Review (Nasdaq Composite, S&P 500, and Russell 2000)
3) 11:20 Stock Review – Semiconductors: SMH (ETF), NVDA, AMD, AMAT, LRCX, ASML, CAMT
4) 13:40 Stock Review – Medical Products: ALGN, SWAV, STAA, INMD
5) 15:15 Stock Review – Software: BILL, TEAM, CRWD, ZS, DOCU, NET, DT
6) 17:10 Stock Review – Watch List/General Ideas/Commentary: ZBRA, ROKU, SNAP, ULTA, TRMB
7) 19:25 Setups: PGNY, NVS
8) 21:50 Conclusion/Summary

Market Summary:
The Nasdaq Composite and S&P 500 are in strong uptrends but there’s some weakness beneath the surface, specifically in small and mid-cap growth stocks. You can see it in the charts of IWM, IWO, MDY, ARKK and FFTY. They are not broken down by any means, but they have definitely been weak the past few days. In this video, I discuss three questions: 1) Why is this happening? Because the Mega Cap stocks (i.e. AMZN, MSFT, AAPL) weigh heavily on those indexes and are helping to keep them in strong uptrends. Also, the sector rotation continues to keep the S&P 500 propped up. 2) How do you interpret this price action? One of two things happens from here, either the weakness stabilizes and small and midcap stocks start to participate, or the weakness will weigh down on the overall market. 3) How do you position yourself? It depends on what you own. If you mostly own index ETFs, stick with them because you are probably doing well. If you own individual stocks, again it depends on if you own Mega Cap names or more of the smaller cap ones.

Conclusion: 1) Be patient and wait for a clearer picture. It’s tough to turn bearish because the indexes are so resilient, but it doesn’t hurt to wait for a little more clarity. I know we are in a strong trend, but I wouldn’t be doing the members any favors but not addressing the recent weakness, and that’s why I’m encouraging patience for now. 2) Do not chase extended stocks. Even when I rotated out of some of my medical products stocks and into a few software names, I still bought them on pullbacks. In other words, don’t forget to get strong entry points. 3) Stick to a loss cutting discipline. I know it’s not fun, but when stocks decisively break down, it’s usually wise to cut your losses. As always, use the 10-week moving average as your guide.

I will continue to monitor the price action and keep you updated in this weekend’s video. Of course, if anything important comes up in between videos, I will either email members or do a webinar if I see anything significant. Thank you and good luck for the remainder of the week.

Unusual Option Activity
7/7/21 S&P 500 ETF (SPY) with 1000 Dec. 31st (Q) $435 calls opening this morning $17.10 to $17.50 range
7/7/21 Floor and Decor (FND) 600 October $110 calls with buyers today $8.30 to $8.90
7/7/21 Tesla (TSLA) has a large opening seller of 2000 Aug. 6th (W) $650 puts $40.70 to $37.80 early today
7/7/21 Amazon (AMZN) with 400 December $4,250 calls bought today up to $111.40, a more than $4.5M position into the big breakout
7/7/21 Z-Scaler (ZS) with 610 July 2022 $220 puts sold to open $34.75
7/7/21 Cloudflare (NET) with 1300 January 2023 $100 puts sold to open for $20.30 showing confidence longer-term
7/7/21 Snowflake (SNOW) with 300 November $280 calls bought $15.50
7/7/21 Pinterest (PINS) with 925 January $67.50 puts sold to open today for $5.85/$5.90
7/7/21 Shopify (SHOP) buyer 200 January 2023 $1500 calls for nearly $8M
7/7/21 Trade Desk (TTD) with 1100 August $95 calls bought early $1.95 to $2.50 and also the weekly $80 calls hot 3150X
7/6/21 Microsoft (MSFT) with 1500 July 23rd (W) $275 puts sold to open $3.85
7/6/21 Square (SQ) with a $1M Aug. 13th (W) $260 call position opening $9.50
7/6/21 US Steel (X) buyers of 2000 July 23rd (W) $23.50 calls for $1.19 to $1.20
7/6/21 Z-Scaler (ZS) with 500 January $260 calls bought this morning from $13.95 to $15.20
7/6/21 Z-Scaler (ZS) also seeing 250 January $260 ITM puts sold to open for $50.15