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Monday May 12th
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“Blame it or praise it,
there is no denying the
wild horse in us.”
– Virginia Woolf
Hello everyone!
Stocks are rocketing on the news that the U.S. and China will reduce tariffs for 90-days while they try to form a larger trade agreement. Apple and other big tech names are pumping.
What’s interesting right now, is that as these growth stocks pump, the more defensive companies that were performing outrageously well, like PM:
And Walmart:
Are sinking. This is expected…as money rotates into the faster-performing stocks, it will rotate out of the defensive sector.
I would be wary of putting on very many positions today. This is a dramatic move up, and we’re getting closer to OPEX on Friday. I’m waiting at least until tomorrow to even think about putting any trades on.
Our SPX levels for this week. We have an upper resistance line of $5,843 and a support line around the $5,714 mark. I expect we’ll hover between these two lines into the end of the week.
Despite the market rally, yields are telling a different story. They’re still rising, which to me, indicates even more reason to be cautious of this rally.
Onto tickers!
CHWY
Last week, Amazon announced they would be adding vet prescriptions to their offerings. This could be bad news for companies like Chewy, who have enjoyed relative competitive moats in this space. Not only that, but CHWY is flirting with all time highs.
We’ll see what happens tomorrow, but if we break below the $38 mark, I like the 23 MAY 25 $37.5 PUT. At $0.80 right now.
HIMS
HIMS has blown past any sort of volumetric support. It’s nearest level is at $50. I like the 20 JUN 25 $50 PUT. I expect quite a bit of retracement on this one, especially after OPEX.
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To Better Trading,
Alex Reid
