Market Outlook & Review 8/16/2020

Another flat week in markets… S&P 500 up narrowly, NASDAQ down narrowly… somewhat fixing the spread between the two that inevitably needs to correct soon. While we cover a lot of smaller cap names with strength, the distance that biotech & the largest tech companies has created has made things a bit more overblown than usual in the NASDAQ index.

Last Weeks Trades – WMT & SPXS Calls, Trimming Gains On STX, TFII, WCLD & SKYY

Last week was a trimming week in the longterm hold category. I purchased CRON shares, and still have outstanding $7 calls with a few months to expiration. I still like the company fundamentals, and am looking to see a boom headline in the space move the overall cannabis segment. CRON offers solid fundamentals compared to their peers, although I am also looking into Aphria Inc. whose ticker is APHA.

I also took profits on STX, TFII, WCLD & SKYY, closing all positions. I will look to reenter after a shakeout of prices, but the current gains warranted a close & re-entry.

On the options front, on Thursday afternoon I purchased WMT calls for $132 with a next day expiration which closed with a solid profit. I also purchased some $6 SPXS calls with a 10/16 expiration, to add to an existing spread of $7-9 calls for the same date, as I expect to see volatility rise before the election & “COVID-19 second wave”.

Market Reports We’re Watching This Week

The beginning of the week is a bit major-news-light, but Wednesday we will be watching the US Building Permits count & Change, as well as the FOMC minutes.

On Thursday, the Initial Jobless Claims & 4 Week Average reports will be released.

Closing the week, on Friday, there will be many PMI Survey Numbers & Existing Homes Sales numbers release.

In these times where it is difficult to gauge exactly where the economy is heading, these numbers may offer us some sobriety from the plethora of earnings reports coming in.

This Week’s Earnings Reports

There are 517+ earnings calls this week, many of which are large cap companies in the tech & consumer spaces. Walmart , Home Depot & Salesforce are among a number of names to be watching for their reports.

It’s beneficial to be watching how these economic numbers pair up with the earnings report numbers, as it will give greater insight into the true spread between the market indexes & the overall real economy, as a lot of highly-saturated large names have been dictating the flow of the macro indexes for the most part recently.

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