Topics covered:
1) 0:00 Announcements
2) 0:30 Market Commentary and Index Review (Nasdaq Composite, S&P 500, and Russell 2000)
3) 13:30 FOCUS LIST: NVDA, LLY, MSFT, ISRG
4) 16:00 Stock Review – Software: IGV (ETF), NOW, PANW, CYBR, GWRE, GDDY
5) 18:00 Stock Review – Semiconductors: SMH (ETF), AVGO, TSM, CRUS, ARM
6) 20:05 Stock Review – Biotech/Medical Products: XBI (ETF), CRNX, HALO, TMDX, TWST, GH
7) 21:45 Stock Review – Watch List/General Ideas/Commentary: META, TSLA, NTAP, FTAI, VRTX, AMGN, ALNY, CWAN, ASTS, WMS
8) 25:15 Conclusion/Summary

Market Summary:

QUICK ANNOUNCEMENT: THIS WEEK’S MIDWEEK VIDEO WILL BE POSTED ON TUESDAY, AUGUST 6TH BY 8PM EST. A DAY EARLIER THAN THE NORMALLY SCHEDULED TIME.

When I emailed the Market Note to Members on July 9th, I reduced exposure because I was expecting a normal pullback to the 50-day moving average. After this pullback occurred, I thought were seeing signs of the selling stabilizing, and that we would hold the 50-day on the Nasdaq Composite. I started to increase my exposure, and we even saw a Day 4 follow through day (FTD) for the S&P 500 on Wednesday, July 31. Unfortunately, that FTD was immediately met with two days of distribution, and we took out the lows from the recent rally attempt that started on July 25. This led me to reduce exposure even more, and I remain in a defensive position (approximately 25% invested).

When we have power trends, I constantly remind members of the rules/guidelines. Now that we are in a corrective market, I need to remind members of some basic guidelines during downtrends and choppy environments. 1) Raise cash. This is mostly for traders, but even if you are a long-term investor, you still have to have some form of a loss cutting discipline. In my view, that level is the 200-day moving average if you are longer-term. 2) Cut losses. Again, whether it’s a dollar stop, a percentage stop, or a technical stop, you have to have some form of a loss cutting strategy. 3) Use lighter positions if you decide to trade. I prefer members take some time off to reduce frustrations, but if you are inclined to trade, at least minimize your position size until market conditions improve. 4) Show some patience and discipline. DO NOT HAVE FOMO on any little uptick in the market. 5) There will be another power trend in the future, but in the meantime, it’s very important to protect your mental capital.

From here, I don’t like that the Nasdaq Composite and S&P 500 saw heavier selling this past week. My instincts tell me that this might take 6-8 weeks for bases to build again and for some the bullish sentiment to wear out. I’m surprised that the NAAIM number ticked higher this week. I realize that it’s only one sentiment measure, but it definitely shows complacency which is not good in my view. Again, I will not get overly bearish. I’m simply going to remain defensive. Of course, we will see some up days over the near-term, but I don’t think it will be anything sustained for a while, which the environment I prefer to trade and that’s more conducive to my style. In the meantime, remain defensive, show some discipline, and be patient. As always, I will take this day-by-day and present any stocks that are showing great relative strength. For now, I’m not finding much to get excited about while going through my screens and I discuss it in this video. Thank you and enjoy the rest of your weekend.

Unusual Option Activity:
8/2/24 S&P Equal Weight ETF (RSP) buyers of 1400 Sept $162 puts at $2.10 s $165 puts adjust
8/2/24 Russell 2000 ETF (IWM) 8500 Dec 2026 $190 puts sold to open at $15.55, over $14M
8/2/24 Silver ETF (SLV) with 8500 June $29 calls sold to open $2.16
8/2/24 Energy ETF (XLE) sees 1875 Jan 2026 $90/$89 bull risk reversals buy at 8 cent debits
8/2/24 Target (TGT) sees a block of 10,000 Sept $120 puts sell to open $1.91
8/2/24 Uber (UBER) sees 1000 Nov $60 puts sell to open $6.15
8/2/24 Phillips 66 (PSX) 1250 Nov $130 puts sell to open $6.88 as August $135 short puts adjust
8/2/24 Citigroup (C) with 3325 Dec 2026 $52.50 puts sold to open at $6.45, over $2.7M in premium
8/2/24 BeiGene ADR (BGNE) opening sale for 1000 Oct $170 calls at $8
8/2/24 GE Aerospace (GE) with 5000 Oct $150 puts bought at $5.85
8/2/24 Meta (META) with 1500 Aug 30th $490 calls buying at $22
8/2/24 Amazon (AMZN) 2000 Nov $150 puts sell to open $6.40 to buy 2k of the $175 calls at $10.55 in bull risk reversals
8/2/24 Amazon (AMZN) also with 1200 June 2026 $250 calls buy at $9.74 as $270 calls adjust
8/2/24 Camtek (CAMT) opening sales of 1500 Nov $85 calls at $12.06 as the $105 short calls adjust
8/2/24 Qualcomm (QCOM) opening sale of 350 June 2026 $140 puts at $18.50
8/2/24 Qualcomm (QCOM) block of 1100 Feb $145 puts sell to open $11.60
8/2/24 Nvidia (NVDA) 20,000 Aug 23rd $88 puts sell to open at $1.87 as some Aug 9th short puts adjust
8/2/24 Nvidia (NVDA) also a block of 5000 August 16th $90.50 puts sold to open $1.37
8/2/24 Nvidia (NVDA) also 4000 Sept 2025 $40 puts sell to open at $1.17
8/2/24 Nvidia (NVDA) seeing large buys for over 160,000 next weeks Aug 9th $115 calls at $1.44
8/2/24 Advanced Micro (AMD) sees over 2700 March $145 calls bought at $19.15 to $19.95, over $5M
8/2/24 Advanced Micro (AMD) seeing 3000 Nov $175 calls bought $4.85
8/2/24 Marvell Tech (MRVL) with 7500 Sept $50 puts sell to open $1.49, adjusting weekly $61s
8/1/24 S&P 500 ETF (SPY) large buyers of 8000 Jan 2026 $565 puts at 36.50 to $37.80
8/1/24 S&P 500 ETF (SPY) also large long term buyers of 10k each Jan 2026 $705, $710, and $715 calls
8/1/24 Homebuilders ETF (XHB) buyer of 5400 Sept $105 puts at $1.07 as the $100 puts adjust
8/1/24 Spotify (SPOT) large buyer of 1600 Oct $380 calls at $12.35 to $14.40
8/1/24 Berkshire Hathaway (BRK/B) buyer of 500 December $420 calls at $34
8/1/24 Axsome Therapeutics (AXSM) buyers of 2500 Aug $80 puts at $1.65
8/1/24 Biogen (BIIB) buyer of 590 Sept $195 calls at $19.76 as Aug $210 adjust
8/1/24 Bristol-Myers (BMY) buyer of 2k Nov $49 calls at $2.58 to $2.66
8/1/24 Nvidia (NVDA) sees 1600 Aug 23rd $112 ITM calls buying at $9.70 to $10.35
8/1/24 Nvidia (NVDA) sees large opening sellers of 16,000 August 30th $106 puts at $4.20
8/1/24 Meta (META) with 2200 Oct $585 calls buy at $8.30 as the August $540 calls adjust
8/1/24 Meta (META) also opening sale of 1800 Sept 13th $455 puts at $5.10
8/1/24 ON Semi (ON) with 7500 Sept 6th $65 puts sell to open $0.61
8/1/24 Google (GOOG) sees 6000 Sept $175 puts sell to open $6.00 to $5.80
8/1/24 Microsoft (MSFT) with 5000 October $410 puts sell to open $9
8/1/24 CrowdStrike (CRWD) large opening sale of 4125 Oct $210 puts at $13.80
8/1/24 CrowdStrike (CRWD) also sells to open 3300 Nov $210 puts at $16.25
8/1/24 CrowdStrike (CRWD) opening sale of 1500 Nov $180 puts at $7.80
8/1/24 Marvell Tech (MRVL) seeing 9300 Sept $52.50 puts sell to open $0.71 to $0.72
8/1/24 Qualcomm (QCOM) sees 1000 June $160 puts sell to open $18.10