Sunday afternoon, the FOMC made a surprise mid-meeting decision to cut interest rates to zero and aggressively inject another 700 billion.  An action that would typically bring the bulls charging back had an opposite effect scaring the market and pushing the futures limit down just minutes after opening Sunday evening.  It appears the Friday gains disappeared in one fell swoop on the weekend reversal.  Price volatility will be extreme at the market open and don’t be surprised it we trip another circuit breaker halting trading for 15 minutes shortly after the open.

Asian markets closed down across the board, and European markets are falling as much as 8% this morning.  Downside pressure could easily create new market lows this morning as panic grips the market unable to come to grips with the outbreak impacts.  Protect your capital as extreme price volatility is likely to continue for the near future.

Economic Calendar

Earnings Calendar

We have a big week of earnings reports starting Monday with more than 160 companies reporting results.  Notable reports include COUP, HQY, REV, & TME.

Top Stories

The Government is pulling out all the stops trying to stop the market from bleeding out.  Friday, the President declared a National Emergency, freeing up 50 billion dollars for stimulus setting of a strong buying rally into the Friday close.  Late afternoon on Sunday, the FOMC made a second mid-meeting decision to cut the interest rates to 0% and stepping up aggressive operations to the tune of 700 Billion.  The action was not received well by the market, with the Futures dropping limit down in about 15 minutes after opening Sunday evening, and treasury yields fell sharply.

The CDC is asking to cancel or postpone all group activities of 50 people or more.  California and New York have ordered closures of bars, night clubs, restaurants, and other states are soon to follow.  New York is also closing its schools.  Las Vegas has started to shut down as well, with all the MGM and Wynn resorts closing its doors this week.

Piling on to the bad news, Apple has been fined 1.2 Billion Dollars by French antitrust authorities early this morning. 

Technically Speaking

The Friday afternoon rally allowed the QQQ to recover its 500-day average closing the week with a little hopefulness of a relief rally.  Sadly that hopefulness faded quickly after the shocking FOMC action scaring the market that things but be much worse than anticipated.  With the market in full-on panic mode, there’s not much to hang our hat on technically with such wild emotional swings.  With the futures, limit-down expect an open that wipes out the entirety of Friday’s gains and the possibility of new market lows.  Don’t be surprised if a circuit breaker trips shortly after the open halting trading for 15 minutes for the 3^rd time in under a week. 

It goes without saying this is a very dangerous market with no relevant metrics to guide traders as to what comes next.  We know the impacts are going to be huge but were trying to shoot at a target in total darkness with no idea how long the night will last.  Anything is possible, and the best traders can do is protect their capital by standing aside while the violent price action continues.

Trade Wisley,

Doug

Good Morning team.

The market is finally trying get a bounce and the move seems pretty broad based this morning.  Be careful with your short positions!  Also keep in mind that volatility is likely to produce some big swings.

With that in mind there are stocks showing good signs.  INTC is past its earnings and has successfully broken its downtrend. The bid/ask spread are wider than normal but take a look at the JAN contracts between 70 and 80 deltas.

I have mentioned TUP before but it has now tested the downtrend trend break and is showing signs of buyers stepping in at support.  Options on this stock are not good so its if your interested its better to just trade the stock.

MCD moved big on earnings this quarter and has now pulled back and buyers are coming in at price support.  A DEC 170/165 Put Credit spread or just a straight directional might be in order.  Personally I favor the JAN contracts.

Watch carefully for an intraday pullback.  IF, it holds a higher low there may be an opportunity to buy some IWM calls for a quick rally.

KO reported well today and is now breaking resistance.  The JAN 45 Calls look very tasty right now.

Once again this is very early and trading this much volatility is not for the faint of heart. Consider that before taking on any new risk.

Remember all trade ideas are for your evaluation and consideration.

Good Morning team.

We have been keeping in an eye on XLP and this morning it looks very good.  Consider the JAN 52 Calls with a stop below $54.25.

We have also been watching MDLZ Consider the 40 or 41 JAN Calls with a stop below $42.90.

Good Afternoon Team.

During the live session today Dish alerted up to a pop out of the box pattern. The stock is still under some resistance so take that into consideration if you decide to enter this position.  Consider the DISH the OCT 32.5 Calls to establish a directional position.  An initial conditional stop $34.45.

Remember all trade ideas are for your evaluation and consideration.

Good Morning team.

Markets are pulling back due to more trade war jitters but this pullback has setup a couple trades in XLK and XLE.  Please keep in mind my intention is to try and hold them through earnings session because I believe these sectors will produce good earnings.  I have no idea if my assumption is correct so you may choose not to take them.

On XLK consider the SEP 68 Calls.  The 67 strike would work as well.  I will place my initial stop at $70.10 to allow the ETF a little room to move.  If it does move up we will then consider selling some calls against the position.

On XLE consider the SEP 73 Calls.  My initial stop will be at $75,00.  Once again if the price moves up we will look to sell calls against the position.

Remember all trade ideas are for your evaluation and consideration.

Good Morning team.

The markets are moving fast this morning so I hope you had some alerts set and are making money this morning.

DDD has broken out of my alert and even-though it moved quickly I still think its trade-able as long as it fits your risk tolerance.  Consider the AUG 13 Strike Calls with an initial stop at $13.80.

TEVA also triggered my alert this morning and is looking higher.  Consider the SEP 22 Calls with an initial stop of $22.30.

Remember all trade ideas are for your evaluation and consideration.

Good Afternoon team.

Today in the live session we made a trade adjustment and added a new position.

First our trade in INTC dropped on an analysts downgrade.  If you closed the entire position there is no problem with that at all.  However, to modify the trade we turned out 60 strike short call into a Bear Call Spread buy buying the 65 strike AUG Call.  Then we sold the JAN19 long call position to capture a gain. $494.85 overall gain.

HD is consolidating and holding up very well.  To take advantage of that consider the SEP 190 Calls to begin a directional position.  We will wait for the stock to move and then consider selling calls against the trade.  Initial stop was set at $196.90.  Keep in mind this may a early on the entry so you can choose to wait for follow-through price action.

Remember all trade ideas are for your evaluation and consideration.

Good Morning team.

I apologize everyone I forgot to post a couple of trades we added yesterday during the live session.  It’s not a problem because they have really not moved and I think you could enter them even cheaper today if your interested. 

Both of these trade are early entries so you may choose to wait until they breakout.

Consider the low risk entry in P using the 7 strike AUG Calls.  The SEP 7 Calls would also work if your wanting a little longer hold time.  Initial Stop is tight a $7.35 conditional order.

The next trade is M.  Consider the AUG 37 strike Calls with and initial conditional stop at $39.00.  

Keep in mind with the FOMC this afternoon there is a chance I will take some profits to reduce risk ahead of the announcement.  Have a great day!

Remember all trade ideas are for your evaluation and consideration.