Weekender for 3/26
1. Market Summary
Stocks Surge Early
- Stocks surge early, then blow the gains, only to be saved by the last hour.
- Volatile intraday, volatile day-to-day. At least some things are constant.
- Will the market rally more? A look at the Fed versus the economics.
- What does the Fed really want? The market to rally or sell off?
- The PHLX Semiconductor Sector (SOX) moves to a new recovery high, the Nasdaq and Nasdaq 100 hang in near the February highs. Money still seeking the “too big to fail” mega-caps.
- Strange bedfellows: mega-cap tech and precious metals lead the market.
Bulls are humming “thank heaven, for last hour rallies.” After a big upside morning in futures and a further rally from the opening bell, stocks peaked five minutes after the European markets closed. It started as just a test over the next hour, then failure. Stocks skid lower half way into penultimate hour. They bounced, faded again, then managed a rebound into the close. That last gasp move flipped the large cap indices back to positive (though the SOX was never negative) as the big indices either added new highs (SOX), again probed the Wednesday peaks (Nasdaq, Nasdaq 100), or just hung on at support for dear life (DJ30, S&P 400, DJ20).
NOTE: The figures and information above are from the 3/23 report.
Watch the Investment House Videos For This Week Here!
NOTE: The videos are from the 3/22 report.
2. Targets Hit
Technical Trader Alert:
Apple Inc. (NASDAQ: AAPL): The mega-cap Nasdaq big names have found a new niche: a safe haven for their “too big to fail” persona they have acquired as the banking issues erupted. We already made money on Microsoft (NASDAQ: MSFT) with its mid-March surge.
At the same time MSFT started higher, AAPL started higher as well. Indeed, we issued the alerts on AAPL and MSFT on the same day. With AAPL, the play was May $150 call options at $10.10 on the ask side. AAPL had just faded to test the 50-day exponential moving average (EMA). It bounced on March 13, but gave up quite a big chunk of the session move. With that, we held off until the next session to see if AAPL could continue the move. Sure enough, AAPL gapped higher, giving us the entry signal.
From the entry, it did not take a lot of thought or management of the play. AAPL moved higher during five of six sessions into Thursday, March 22. That session AAPL surged upside — after an already nice eight-session rally off the 50-day EMA, that kind of extra strong surge has you watching for a stall. Sure enough, AAPL started to peel back from that surge.
We did not wait around. We issued the alert to sell half the position with the options bidding $15.96, a solid 58% gain. We kept half the position working because these stocks are attracting a lot of money their way, and after a short test of the 10-day EMA, AAPL could be right back to the upside.
We also took gains this week in the following positions:
Coinbase Global Inc. (NASDAQ: COIN): 76% gain in the options, and another 86% gain in the options.
Microsoft Corp (NASDAQ: MSFT): Took the last part of the gain, a nice 73% gain in the options.
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3. Covered Call Options Play
Las Vegas Sands Corp. (NYSE: LVS) — Las Vegas Sands Corp. is currently trading at $54.73. The May 19 $55 Calls (LVS20230519C00055000) are trading at $1.05. That provides a return of about 8% if LVS is above $55 by the expiration.
