Hi all,

Lots of events this week for investors and traders to digest. We had the 0.25% increase decision which surprised almost no one. However, Chair Powell did sound a little dovish (or at least that is the way traders took it) when he made his comments after the release of the number. Markets rose into the remainder of the trading day.

Then we had some influential company earnings releases. NFLX blew away expectations after the close Wed and powered higher on their numbers. One the flip side. AAPL, AMZN and GOOG all disappointed with misses on Thursday. Most notably, AAPL gapped down but then buyers obviously saw value and started pushing the price back into the green where it finished the day.

We ended the week with some job growth numbers that came out at about 3 times higher than expected. Interest rates and the US dollar popped on the news and index futures sank. Friday turned into a wild ride with the markets popping up at the open and then in the afternoon, sold off to close near the opening price. That price action could be considered bearish but there still could be a lot of ROMO (regret of missing out) on this rally that has already happened with investors and their money sitting on the sidelines waiting for another leg down which has not happened yet.

Overall the week, money continued to flow into riskier, high growth stocks with the IWM small caps and the QQQ the biggest upside movers. The DOW was down slightly which illustrates this rotation of capital.

Volatility remains low but may be bottoming as we have come a long way up from Dec and Oct lows. Watch for more volatile action this week with 50% of S&P stocks still on deck to report.

Last note; have you noticed AI stocks are getting a lot of attention these days? Watch for more companies to jump on the band wagon and likely get a subsequent pop up in price. This could be the start of a hot sector mania I discuss in my books.

 

Key levels:

 

• DOW (33,926 now) – support level 33,000 and resistance is at 34,300
• QQQ (306) – support level 280 and resistance is at 310
• SPY (412) – support level 385 and resistance is at 420
• IWM (197) – support level 185 and resistance is at 200

 

Recap Video:

 

Watch the recap on YouTube

 

Positions:

 

• WLLW on Toronto Stock Exchange (TSX) - long term hold. ($0.85)
• FOM on TSX - this is a small cap mining company. I like the drill results they are getting and management team is solid. Highly speculative at $3.00
• FLEX - long
• ATVI - long $75.7 still trying to sell some calls
• TSLA – $210 Calls expired and I kept premium, still short $60 put options March expiry
• DUST – long

 

What to Watch for this Week:

 

• Tuesday 11:00AM – NY Fed inflation expectations
• Thursday 8:30AM – Jobless claims

View the Economic Calendar on Trading Terminal

 

Sectors in Play Last Week:

 

• Consumer Services, Discretionary and Technology were the strongest sectors for the week.
• Energy was the largest losing sector.

 

Earnings this week:

 

• Monday - CMI, ON, TSN, PINS, AMGN, ATVI
• Tuesday - RCL, BP, CMG, VRTX, ILMN
• Wednesday - TM, CVS, UBER,
• Thursday - ABBV, PEP, PYPL, EXPE

View the Earnings Calendar on Trading Terminal

 

Tracking:

 

• AI – artificial intelligence stocks are hot – looks like a new hot sector mania play.
• ATVI – long stock position and trying to selling $90 covered calls based on MSFT trying to buy them at $95 in summer 2023. FTC is suing to block the deal but I think their case is weak.
• FLEX - uptrend still holding long $21 on breakout from watch list.
• GDX – uptrend broken – now short with DUST.
• META – resistance at $200 – could be a good place to go short some Call options weekly.
• TSLA – Into resistance at the $200 level as well.
• UNG – still looking weak. Has to bottom somewhere.