Stocks closed on a positive note Friday, as all major stock indices finished in the green. However, for the last two weeks, stocks have been experiencing higher volatility due to the uncertainty about the U.S – China trade outcome.
The Dow has now experienced five straight weeks of losses. And tech hasn’t fared much better either, as the Nasdaq dropped more than 2.3% this week.
Tech stocks with strong ties to China have been the hardest hit, names like Apple, Intel, Nvidia, and Qualcomm are all trading significantly lower after fears of a trade war hit the market 2-3 weeks ago.
One thing I do find interesting is that traders are getting more comfortable with all the back and forth action.
How can I tell?
Well, if you look at the VIX, “the market’s fear index,” it’s only trading at 15.85. On May 13 the VIX was trading at 20.55, which is about 30% lower from where the market closed on Friday.
And let’s not forget, Thursday was brutal for stocks and most traders…
Well, not all traders…
I was able to wrestle down some winners on Thursday:
(ROKU has been a flight to safety during the recent market sell-off, and a symbol that makes me money, if you’re not getting my real-time alerts and portfolio updates, click here to start today)
My approach over the last few weeks hasn’t changed.
- Keep a balanced portfolio (consisting of long calls and long puts)
- Trade options to define risk
- Trade smaller and be quicker to take profits
This market has been like a yo-yo…one day it’s up… the next down…
Luckily I’ve been able to be on the right side and take advantage of the choppy market conditions.
While Thursday was a tough day for stocks, I was long the market going into Friday… and boy did it pay…
(My options strategies work in all market conditions, I use my own money to prove it… my clients receive my trade plan, alerts, and portfolio feed in real-time, if you are not a client then click here to join.)
We’re heading into a shortened trading week, the stock market is closed on Monday in observance of Memorial Day.
However, there are plenty of earnings and economic catalysts to discuss. As well as, some setups I like and trades that I’ll look to put on that I want to share with you.
Table of Contents
- 0.1 Your Jump on the Week – Key Level Watch
- 0.2 Economic Calendar
- 0.3 Corporate Earnings Calendar
- 1 IPO Watch
Your Jump on the Week – Key Level Watch
The markets have been trading in range for a while now… it seems like one day we’re down on trade headlines… the next day, trade news hits the wire and we’re gapping up. However, this time could be different.
You see, the SPDR S&P 500 ETF (SPY) is right around the “Death Line”.
Now, the market failed to break above the blue horizontal line (around $289) multiple times… and the 200-hourly (green line) held as resistance…
The other day, SPY tested the “Death Line” (the red line) – right around $280. SPY got a nice rebound just above $280… but with all the ongoing trade war… we’re one headline away from a potential break.
That said, I’m watching the “Death Line” very closely and waiting to see what the market does at these levels. If SPY breaks below $280, the shorts who have been waiting to pick a top will probably pile in… and longs may start to sell there longs… potentially causing a quick 5% drop.
Now, if you don’t know how to trade in volatile markets… or just need a refresher… check out how I’m able to pull consistent triple-digit winners even when stocks are crashing.
For example, last week, I was still able to make money despite the market selloff the other day.
(Could of…Would of…Should of…Roku closed above $95 on Friday, but holding on to positions has become more difficult in a news sensitive market, want my trade ideas and alerts in real time? Click here to join WMM)
I was also placing market trades like these:
(Some of my favorite options to trade are ETFs, trading SPY and TLT are great ways to make bets on the economy and overall market. If you want my alerts and are not receiving them then click here to get started.)
The reason I’m able to still make money in any market condition is because I keep a balanced portfolio… and I keep an eye on technical indicators, like my money pattern.
For example, just because stocks are crashing… that doesn’t necessarily mean you have to remain on the sidelines… for me, it uncovers some trading opportunities, both on the long and short side.
Some trades I’m looking at on the long side are CGC, DIS and PLNT… on the short side, I’m keeping an eye on TTD, W, DE and IWM.
Now, if I make any moves in these stocks… I’ll be sure to let Weekly Money Multiplier clients know about them in real time… if you want trade alerts and to watch my live streaming portfolio, click here to get started.
Moving on.
We’ve still got some big earnings coming up… but since the market is focusing on the macro view and the U.S. – China trade war, let’s take a look at what’s on tap for economic indicators first.
That said, let’s check out what’s on tap for economic indicators next week.
Economic Calendar
Monday May 27, 2019
- Markets Closed in Observance of Memorial Day
Tuesday May 28, 2019
- 7:45 AM EST ICSC Weekly Retail Sales
- 8:55 AM EST Johnson/Redbook Weekly Sales
- 9:00 AM EST FHFA House Price Index
- 9:00 AM EST S&P CoreLogic’s Case Shiller
- 10:00 AM EST Consumer Confidence
- 10:30 AM EST Dallas Fed Manufacturing
Other Key Events
-
Craig Hallum Annual Institutional Investor Conference, 5/28-5/29 in Minnesota
-
Deutsche Bank Annual Global Financial Services Conference, 5/28-5/29, in NY
- KeyBanc Industrial & Materials Conference, 5/28-5/30, in Boston
- Eurozone confidence
Wednesday May 29, 2019
- 7:00 AM EST MBA Mortgage Applications Data
- 10:00 AM EST Richmond Fed Manufacturing Index
- 4:30 PM EST API Weekly Inventory Data
Other Key Events
- Cowen Annual Technology, Media & Telecom Conference, 5/29-5/30, in NY
- Jefferies Annual IT & Internet & Service Summit, 5/29-5/30, in New York
- KeyBanc Industrial & Materials Conference, 5/28-5/30, in Boston
- RBC Capital Consumer & Retail Conference, 5/29-5/20, in Boston
- Bank of Canada rate decision
Thursday May 30, 2019
- 8:30 AM EST Gross Domestic Product (GDP)
- 8:30 AM EST International Trade in Goods
- 8:30 AM EST Jobless Claims
- 8:30 AM EST Retail Inventories & Wholesale Inventories
- 10:00 AM EST Pending Home Sales
- 10:30 AM EST Weekly EIA Natural Gas Inventory Data
- 11:00 AM EST Weekly DOE Inventory Data
Other Key Events
- Cowen Annual Technology, Media & Telecom Conference, 5/29-5/30, in NY
- Jefferies Annual IT & Internet & Service Summit, 5/29-5/30, in New York
- KeyBanc Industrial & Materials Conference, 5/28-5/30, in Boston
- RBC Capital Consumer & Retail Conference, 5/29-5/20, in Boston
- Bank of Canada rate decision
Friday May 31, 2019
- 8:30 AM EST Personal Income and Outlays
- 9:45 AM EST Chicago PMI for May
- 10:00 AM EST Consumer Sentiment
Now, let’s move onto the corporate earnings calendar.
Corporate Earnings Calendar
Tuesday May 28, 2019
Earnings Before Open
- Nio Inc. (NIO) implying 15.01% move.
- Momo Inc. (MOMO) implying 12.58% move. Historical average move 15.2%.
- American Woodmark (AMWD) implying 12.12% move (monthly contracts expiring in June). Historical average move 16.36%.
- Booz Allen Hamilton (BAH) implying 7.75% move (monthly contracts expiring in June). Historical average move 5.85%.
Earnings After Close
- Workday Inc. (WDAY) implying 8.03% move. Historical average move 6.1%.
- YY Inc. (YY) implying 9.21% move. Historical average move 13.73%.
- Heico Corp. (HEI) implying 5.40% move (monthly contracts expiring in June).
Wednesday May 29, 2019
Earnings Before Open
- Canada Goose Holdings (GOOS) implying 15.87% move. Historical average move 17.06%.
- Dick’s Sporting Goods (DKS) implying 9.74% move. Historical average move 13.68%.
- Abercrombie & Fitch (ANF) implying 12.99% move. Historical average move 19.56%.
Earnings After Close
- Palo Alto Networks (PANW) implying 9.14% move. Historical average move 9.55%.
- Veeva Systems (VEEV) implying 10.78% move (monthly contracts expiring in June). Historical average move 9.14%.
- PVH Corp. (PVH) implying 10.02% move (monthly contracts expiring in June). Historical average move 7.97%.
Thursday May 30, 2019
Earnings Before Open
- Dollar General (DG) implying 5.72%. Historical average move 7.56%.
- Dollar Tree (DLTR) implying 7.08%. Historical average move 9.81%.
- Burlington Stores (BURL) implying 7.14%. Historical average move 9.37%.
- Canadian Solar (CSIQ) implying 9.32%. Historical average move 9.78%.
- Tech Data (TECD) implying 12.50% move (monthly contracts expiring in June). Historical average move 15.85%.
- Sanderson Farms Inc. (SAFM) implying 8.60% (monthly contracts expiring in June). Historical average move 7.24%.
- Uber Technologies (UBER)
Earnings After Close
- Costco Wholesale Corp. (COST) implying 4.13% move. Historical average move 4.86%.
- ULTA Beauty (ULTA) implying 8.39% move. Historical average move 9.22%.
- Vmware Inc. (VMW) implying 6.63% move. Historical average move 5.7%.
- Zscaler (ZS) implying 14% move.
- Gap Inc. (GPS) implying 9.13% move. Historical average move 10.55%.
- Dell Inc. (DELL) implying 9.39% move (monthly contracts expiring in June).
Friday May 31, 2019
Earnings Before Open
- Big Lots (BIG) implying 13.37% move (monthly contracts expiring in June). Historical average move 12.86%.
IPO Watch
Now, there aren’t any IPOs in the coming week…
However, there is one recent IPO I’m watching.
Luckin Coffee (LK) – a Chinese coffee company of all things. I can’t believe it, but I actually like this one and think it is going to turn around soon. It’s a wildcard play and there are no options on it yet…
Now, I’ll be keeping this on my radar and watching it on the hourly chart.
Here’s a look at LK on the chart.
I haven’t done anything with it yet… but I’ll let Weekly Money Multiplier clients if I make any moves in LK (or other names I’m watching) – whether it be in the stock or options.
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