The MARKet Update – 10/16/22

Good evening O$ traders!  I want to welcome both new and old members to a new feature I’m calling “The MARKet Update”.   For the most part, this site has primarily issued trade alerts, but I’d like to start adding more updates throughout the week.  It may be daily, or a few times a week, but at minimum weekly.  These will consist of my personal thoughts for what I’m thinking about specific stocks, options, and the general market for that day and/or week.

Primarily I watch a few essential things during market hours.  Specifically, the order flow of S&P futures contracts (currently December) and the Nasdaq Futures (also December).  These provide me with the general “feel” of the overall market of being bearish or bullish at that specific moment in time.  This changes day to day as we’ve recently witnessed this past Thursday/Friday.  Then I also look at the order flow of key stocks within the S&P and Nasdaq.  I also examine the whale flow of options, and technical demand and supply levels via charts of those said stocks.  For example, when I look at Tesla (TSLA) on my technical chart I see a stock that is severely oversold and would put this at the top of my buy list.  BUT when I look at option buys of calls/puts it barely skews over to the call side–so no clear cut favoritism here yet which I prefer to see.  Also the orderflow of the stocks has been bearish and has been indicating weakness the past week.  Moving forward, TSLA is still top of the watchlist of calls to buy–but just not yet.

We had 4 buy alerts this month for SPY, QQQ, AMZN, and AAPL.  The AAPL options gained as much as 100% since the alert, and currently at a 25% gain as of Friday.  The AMZN options gained 41% after the alert, and now sit at -33%.  There is a month left to expiration, so let’s digest why I didn’t issue a sell alert for these despite the gains.  On Thursday I witnessed whale(s) buying up the ES/SPY futures contracts with heavy volume.  On Friday the market sold off on lighter volume as did AAPL and AMZN.  However, many times when volume is light it’s just not that believable and shows a lack of true commitment to the downside.  The upside on Thursday was very real, and with earnings now starting this week and continuing with some big ones the following week, I personally felt it was worth seeing what next week would bring.  I want to encourage everyone to set there own risk to reward on the plays you participate in.   In the entire year of plays issued so far, only 6 went lower than the original alert buy in price.  After an alert goes out, if you don’t have a high tolerance to wait for a large percentage gain or can’t afford to risk a loss, go ahead and set yourself a limit order to sell 15%-20% above your buy in and you’ll be extremely profitable using this service.  I personally like to see profits at a higher percentage, so I tend to keep holding the options longer.

In conclusion for today… the market has been absorbing all the continous negative news that has blanketed the tv airwaves and social media.  There is so much money sitting on the sidelines just waiting to get back into the market that any good news may be another signal for the market to redo another buying day like we had this past Thursday.  As you can see in the chart I attached, the futures drop on Friday may have seemed awful, but actually hit a good level of demand/support.  We will most likely be range-bound and break lower only if some new bad news comes into play like bad earnings from the top SPY/Nasdaq holdings.

–Mark