New Stock Pick For Monday

Summary

In this weekly trading video, the host discusses market conditions post-vacation, highlighting a potential short position on a stock sitting at its 200-day moving average. He analyzes the S&P 500's bounce, the Fed's rate cut signals, and market volatility, adjusting his bearish stance to neutral due to unexpected market resilience. He provides a bullish pick with Abbott Laboratories and a bearish pick with Micron Technology, emphasizing day trading over swing trades amid uncertain market direction. The host also teases an updated version of 'Option Stalker Pro' and a live event, aiming to educate and engage traders.

Takeaways

• 📅 The video was recorded on Sunday, August 25th, and it's a weekly update from the speaker.
• 📉 The speaker had taken a break from making videos and mentions being rusty but ready to discuss the market.
• 🔍 A previous stock pick is still liked as a short position, with the stock sitting at the 200-day moving average and not advancing despite market bounce.
• 📊 The speaker discusses the S&P 500 chart, noting the market's inability to break through certain levels and the potential for a short position if the market shows weakness.
• 📉 There's an expectation of seasonal weakness in the market, with a peak coinciding with earnings season and subsequent sell-off due to soft economic releases and FOMC statements.
• 💹 The market's reaction to the FED's statements at the Jackson Hole Symposium was underwhelming, leading to a tempered bullish outlook.
• 📈 Despite a significant drop, the market bounced back, indicating more buying pressure than expected, which has adjusted the speaker's bearish stance to neutral to slightly bearish.
• 📊 Technical analysis shows an all-time high followed by a decline, signaling selling pressure and a potential market top.
• 📅 The speaker notes the current market conditions in August, including seasonal light trading, recess periods, and a lack of significant news to drive the market.
• 📉 The speaker observes heavy volume on market declines and light volume on rallies, suggesting more selling pressure than buying pressure.
• 📈 The speaker provides a bullish pick (Abbott) and a bearish pick (Micron), with strategies for day trading and considering market volatility and potential economic data points.

Q & A

What is the speaker's perspective on the stock market's current state?

The speaker is neutral to slightly bearish, indicating that they see some selling pressure but are not overwhelmingly bearish due to the market's recent rally and lack of clear directional signals.

What was the speaker's last stock pick mentioned in the script?

The speaker's last stock pick was highlighted before their vacation and it was suggested as a short position, with the stock sitting at the 200-day moving average.

What is the significance of the 200-day moving average in the context of the speaker's analysis?

The 200-day moving average is seen as a critical level for the stock mentioned. The speaker believes that any market weakness could cause the stock to fall below this average, indicating a potential short position opportunity.

What economic indicators or events does the speaker believe could influence the market in the near term?

The speaker mentions that upcoming economic data points, such as the jobs report, and the Federal Reserve's actions, particularly regarding interest rate cuts, could influence market direction.

What was the speaker's reaction to the Federal Reserve's statement during the Jackson Hole Symposium?

The speaker was not satisfied with the Federal Reserve's statement, as it did not confirm a rate cut in September, which they believe the market was expecting.

What technical analysis does the speaker use to assess market weakness?

The speaker uses the S&P 500 chart, specifically looking at the market's inability to advance despite a bounce, and the potential to fill a gap and test the 50-day moving average as indicators of market weakness.

What is the speaker's view on the current seasonality affecting the market?

The speaker notes that it is currently a seasonally light period with many traders and even the Federal Reserve on vacation, leading to less market-driving news and activity.

What trading strategy does the speaker suggest for Abbott Laboratories based on the script?

The speaker suggests a long position on Abbott Laboratories, with a strategy of buying October 105 calls that are deep in the money, expecting the stock to move higher in a grinding manner.

How does the speaker approach trading Micron Technology as per the script?

The speaker likes Micron Technology as a short position, especially if the market shows weakness and the stock continues to display relative weakness, suggesting the purchase of October in-the-money put options.

What is the speaker's advice on managing trades during uncertain market conditions?

The speaker advises staying in day trading mode and focusing on short-term trades, with an emphasis on flexibility and daily evaluation of market conditions.

What tool or service is the speaker promoting for trading?

The speaker is promoting 'Option Stalker Pro,' a tool that provides trade signals which they believe will become a primary trade consideration for many traders.