Hi all,

The markets moved higher this week on continued optimism for a rate cut or cuts later in the year. This optimism is now being fueled by a labor market that seems to be weakening a bit based on the most recent data. To be clear, the labor market is still strong by most measures – it is the trend that investors and traders are hanging their hopes on.

The consumer sentiment number released Friday showed a significant and unexpected drop which also helped with speculation that rate cuts could be coming soon. However, this indicator is usually lagging the actual sentiment.

I feel the promise and hype around AI is also keeping a bid under this market and for now the markets are pretty buoyant. We are back close to all-time highs and will likely stay there however, time will tell if we can break out to new highs. 

Summer is approaching and earnings season is drawing to a close. Not sure what catalysts can push us higher now. It seems like the rate cut fixation is a little crazy but we trade the market we have, not the one we think we should have. Betting against this market is not a good strategy right now.

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 Sectors in Play Last Week

• Utilities and Financials were the biggest gaining sectors this week.
• Energy and Consumer Discretionary were the 2 sectors up the least this week.

Key Levels for this Week

• DOW (39,512) – support 38,700 and resistance 39,900
• QQQ (442) – support 432 and resistance 445
• SPY (521) – support 510 and resistance 525
• IWM (204) – support 200 and resistance 205

What to Watch for this Week

• Monday – nothing except a few Fed speakers.
• Tuesday – 8:00 PPI data
• Wednesday – 8:30 CPI data; 10:00 Business Inventories and Home Builder Confidence and Wholesale Inventories.
• Thursday –8:30 Jobless claims; 9:15 Industrial Production.
• Friday – 10:00 US Economic Indicators.

Earnings this week

• Monday – PBR, STNE post
• Tues – HD, BABA pre and NU post
• Wed – HUT pre and CSCO post
• Thurs – WMT, BIDU, JD, DE, LSPD pre and AMAT post
• Friday – nothing noteworthy

Positions and Trades Last Week

• Long gold stocks.
• BA – short $260 call position. 
• BA – short $170 puts May 10th. Expired kept premium – will look at same trade next week.
• NFLX – As per last week’s plan, sold $570 calls expired worthless and kept premium. Will look at selling upside calls next week.
• NFLX - Option trade Friday (0DTE), sold $620 calls expired worthless and kept premium.
• NVDA – long.
• NVDA – Option trade Friday (0DTE), sold $920 calls expired worthless and kept premium. Did this trade last couple of weeks.
• XLU – long as per last week’s plan – sold some Thursday and Friday.

Tracking for Potential Trades

• ARM – Potential for a gap fill back to $120.
• AMZN – Potential to break to new highs. Watching.
• BA- $170 still looks like support.
• DIS – support at $105 and potential to move higher.
• ETHX.b – still watching.
• NFLX - $600 to $630 trading range now. Potential to sell calls or puts.
• RBLX – Bottomed and possible move back to $35.

 

Note: These are investments I am in or watching however, they may not be suitable for all investors. The author of this email is NOT an investment advisory service, a registered investment advisor or a broker-dealer and I do NOT undertake to advise clients or recipients of this email on which securities they should buy or sell for themselves. This email is provided for information purposes only and traders should always consult with their licensed financial and tax advisors to determine the suitability of any investment.