Pete Stolcers | OneOption

I’m Pete Stolcers, I’ve spent 30+ years trading the markets, from the floor of the CBOE to running one of the largest retail options desks in the country. I teach traders for FREE on YouTube. When you’re ready for the next step, our members use: ✅Live chat room for real-time trades and feedback ✅Pro software to find the best setups fast Take advantage of our 14 day free-trial and our FREE weekly youtube videos 🔗 oneoption.com 📷 youtube.com/@oneoption

Market Braces For Big News - Yesterday the FOMC statement was released and there was no policy change. Fed Fund Futures showed the odds of a 25 basis point December rate hike increasing by 5% to 85% after the statement. Earnings reactions from GOOG and MSFT after the close were slightly negative with GOOG selling off and MSFT rallying. The S&P 500 futures are down 20 points overnight. This morning we got our first look at Q3 GDP and it came in at a strong 3.4%. That is slightly better than expected. Initial jobless claims came in at 194K which bodes well for the jobs report next week. Amazon and Intel will report earnings after the close. The early takeaway has been that earnings have been good. More than a quarter of the companies in the S&P 500 have reported and the average blended EPS increase year-over-year has been 29.5% (FactSet). Those are strong results. The big concern for mega cap tech companies is capex. All of them continue to spend billions of dollars on AI and those expenses are going up, not down. I still feel this bodes well for semiconductor companies. The mid-term elections are next week and that is creating uncertainty. With regard to AI stocks, I would only take starter positions at this level. If Democrats sweep the elections, AI regulations will increase and those stocks would react negatively. Would they crater? Not in my opinion. It would take time for the regulations to be passed and in the meantime those companies will continue to make money. I am watching for support and I am watching for an opportunity to add to the starter position. I need to see good market strength and good strength in the group before I add. The market is trapped right in the middle of its 3-month range and it has been trapped most of the year. With all of the pending news, wait for the reactions. Support is at the 50-day MA and resistance is the high from yesterday.oneoption.com/daily_bulletin…

How To Trade This AI Stock Bounce! youtu.be/oVWZ4UA22_g?si=F1jt… via @YouTube

The Eve of Big Market News - The market tested the 50-day MA yesterday and it backed off. I'm not going to read too much into that move. The index is stuck between the 100-day and 50-day moving averages. It is sitting right above horizontal support as well. STX will report tonight and we will see how memory stocks react. Mega cap tech companies will report Wednesday and Thursday. The AI spend is alive and well as far as I am concerned. SPCX secured $40B in financing and META did a share offering to raise $95B. Anthropic filed to go public and that will absorb some of the money that would go into other AI stocks. The Fed is likely to keep rates the same, but any hints of a rate hike in December could weigh on the market. Fed Fund Futures are pricing in an 85% chance for a quarter point rate hike in December. Thursday Q3 GDP will be posted and the consensus estimate is for 3.3% growth. The PCE deflator is what the Fed uses to gauge inflation. Next week the mid-term elections will have a market impact. I believe that AI stocks could rally on a Republican sweep and drop on a Democrat sweep. AI is looking like the next battleground for both parties. If Republicans win the Senate and Democrats win the House the election might not have much of market impact. With all of this pending news it is best to wait for the outcome and reaction. The market has been in a tight compression and it is sitting on the lower end of it. I feel this will be resolved to the upside, but I don't trade my feelings. Watch for choppy price action ahead of major news.oneoption.com/daily_bulletin…

Earnings and FOMC This Week - The SPY is sitting just above the 100-day MA and the odds of it testing that level this week are high. That is the lower end of a horizontal trading range that has lasted three months. It is a major technical support level and if breached, it will spark additional selling. Wednesday, the FOMC statement will be released. Inflation has been rising and most Fed officials believe that there will be another rate hike, perhaps even this year. I doubt they will raise rates ahead of mid-term elections. Based on the Fed Fund futures pricing, there is only a 10% chance of them raising at this meeting and an 80% chance they will raise rates in December. Thursday we will get our first look at Q3 GDP. Analysts are expecting a 3.3% rise. That would be quite strong and all eyes will be on the PCE deflator (inflation reading). It's important to remember that the market can rally when rates are rising as long as economic growth is also rising. Earnings releases will be the primary driver. Mega cap tech companies will reveal huge capex spending. The market might not like that. Last quarter Google raised $85B in a bond offering and Oracle raised $20B. Meta joined the party and announced a $95B stock offering this weekend. SpaceX also secured a $40B loan this weekend. All of this is going into AI. I still feel that semiconductor stocks are going to rally. They are benefiting from this. Over the weekend, Elon said that many neocloud companies will fail and that lending to companies that have no cashflow outside of AI will be very difficult to secure. CoreWeave has seen a huge spike in their borrowing costs to 15% on floating rate loans. That is prompting them to request loans from the chip makers at much lower rates. This shifts risk to the chip makers and it is important to watch how much of their sales are finance. Nvidia argued last week that the new GPUs have a much longer life span of 8+ years which makes them worthy of investments. From a swing trading standpoint, I am going to wait for the news reactions this week. We also have the mid-term elections next week. Democrats have voiced concerns over AI growth and they have environmental concerns when it comes to data center construction. If they win the House and the Senate it could spell trouble for AI stocks. If Republicans preserve both, it would be "friendly" news for these stocks. Day traders should tread cautiously as well. The market is trapped between the 50-day MA and the 100-day MA. The price action ahead of this news is likely to be dull and choppy. Support is at the 100-day MA and resistance is at the 50-day MA.oneoption.com/daily_bulletin…

Why AI Stocks Are About To Rebound Fast youtu.be/jjhDpQ6y_Uk?si=3OwE… via @YouTube

Seasonal Weakness Ending - The market has dropped the last two weeks from the all-time high and the selling pressure has been relatively heavy. SPY is within striking distance of the 100-day MA and I believe it will be tested today. Tech stocks have been hit particularly hard. Earlier in the year a $45B hedge fund went into forced liquidation. That created a deep, swift drop like we are seeing now in SMH (semiconductor ETF) and this move feels very similar. The theme there was to short software stocks and to buy AI stocks. During an "unwind", AI stocks would fall and software stocks would rally. That is exactly what we are seeing now. Investors have also been buying on margin and it is up 40% y/y. They are buying tech stocks and these "weak hands" are getting flushed out. We don't buy just because seasonal weakness is shifting to seasonal strength next week. The market needs to establish a low and it needs to bounce violently from that level. That would show that buyers are acting with urgency. They don't want to miss a year end rally. The reason the last week in October is one of the most bullish periods of the year is because historically it is recovering from a deep drop. The mid-term elections are 10 days away. Thank God! I can't wait for the political ads to stop. That could keep buyers on the sidelines a bit longer than normal. I also sense that if Dems win the House or the Senate that it could spell trouble for AI stocks short-term. They want to regulate its growth. Having traded through the Euro debt crisis in 2010, this is a concern. The ECB is very fragmented with each member representing its country's own interests. Sovereign yields around the globe have been rising and the house of cards (structural debt) could be tested in 2027. The appetite for all of this money printing is waning. TLT has been falling, but not because the Fed plans to change its policy. This is a flight to safety. Yields in Europe (France in particular) are rising, making US bonds more attractive. Next week we will hear from the Fed on Wednesday. Most of the officials feel that another rate hike this year is likely. I doubt they make a move before the mid-term elections. I believe we will see a nice drop and a meaningful low in the next 10 days. That is what I am watching for. Earnings season will ramp up next week and combined with the FOMC statement we should see active trading. The market is in a trading range and given the pending news, I am going to wait for those outcomes before taking swing trades. From a day trading perspective, the ideal open would be a wimpy bounce with mixed overlapping candles that has difficultly penetrating much of the range yesterday. That would set up a good entry for shorts and I expect the 100-day MA to be tested today. I am also watching for a very deep low in SMH that starts early and climaxes at the 200-day MA after 90 minutes of trading. I want stacked red candles down to that level and consecutive tall greens at the bottom that never look back. If I don't see that exact pattern, it's not the low I am looking for. This is a dangerous pattern to trade and it has to be perfect. We may not see it until next week and even then, there is some election risk so it can't be traded aggressively. Support is at the 100-day MA and resistance is the 50-day MA.oneoption.com/daily_bulletin…

The AI Paradox - The market rally has been fueled by AI. Some feel that these stock plays are extremely risky while others feel that they are an incredible investment opportunity. Based on what we've heard from TSM, TSLA, META and SPCX, those capex expenditures are not slowing down, they are increasing. Nvidia said that neocloud demand is "off the charts", but the issue is scarce capital. Capital is not scarce... at the right yield. Investors are demanding a higher rate of return because they view this as a risky proposition. CoreWeave's unsecured debt is trading at a yield of 15%. As the cost of capital rises, profit margins for these companies decline. The AI theme is very different from what I witnessed during the late 1990's. Everyone was excited by the prospects of the internet and they could see how it would replace some careers with new ones. The issue was that many of those companies were unprofitable and they traded at extreme valuations. By contrast, AI has been very profitable for the "picks and shovels" companies. The issue is that AI is going to replace workers at a pace we've never seen. Barclays just announced 5,000 layoffs as they use AI to streamline operations. This is just one small example and most of those are high paying IT jobs. People are excited about AI for their personal use while also being terrified that they might lose their jobs. Society could rebel and investors could decide that this is not something they want to sponsor. Mega cap tech companies have the cash flow to finance capex, but outside funds could be limited. I doubt we will see many capital raises given the high current cost. This paradox is going to result in future market volatility and I welcome that. Buyers and sellers will battle it out. From my viewpoint, semi conductor stocks are very profitable and the supply of chips is low. As long as the price for leasing compute stays high, these stocks will at minimum tread water and they are most likely to rise. I also feel that the mid-term elections could impact AI stocks. Republicans have been supportive of it and Democrats want to regulate it. If Dems win the House and/or the Senate, these stocks could pullback. We have major earnings announcements next week. Seasonal weakness will end tomorrow and the last week of October has been historically bullish, but more so when the market has been down. I expected to see AI stocks rebound after the SPCX release. That didn't happen and the market is down substantially after META and TSLA earnings. This is a time to tread very cautiously. Trading when the market is trapped in a horizontal range is a low probability environment. With major pending news (earnings and mid-terms) I am inclined to sit back and watch this play out. Ultimately, a breakout one way or the other would set up opportunities. QQQ is trading below the 100-day MA this morning and SPY is below the 50-day MA. I am going to watch VXX and the early price action for the first hour before entering trades. Support is the $760.64 and the 100-day MA. Resistance is the 50-day MA and AVWAPQ. oneoption.com/daily_bulletin…

Live Day Trading: Stocks, Options Strategies and Market Analysis. This is a link to the live trading event I will be hosting today. Bring your questions. $SPY youtube.com/live/R3fpdfoMpFk… via @YouTube

SPCX Earnings Will Fuel AI Stocks - Any concerns I had about AI capex were addressed in the SPCX press conference. After the close yesterday SPCX released earnings. The growth was spectacular across all business segments, but their AI revenues stole the show. Revenues surged 9X from $816 million last year to $7.56 billion this quarter. All of the investments they've made in the Colossus data centers will put them on a pace to generate $500 billion to $1 trillion in recurring revenue by the end of 2027. In the press conference Musk said that the payback on AI is six months to a year. SPCX is not leasing out compute on a long-term basis, it is charging based on the "spot" price. That's because it keeps going up. He said that SPCX has looked into leasing compute for themselves and there is no supply. Elon believes that the demand will grow exponentially because the more AI is used, the more applications companies find for it. When asked about financing these projects he said that they have excellent lines of credit and that with such a short payback period these are short-term loans (they do have long-term space projects that are capital intensive). This news has AI stocks rallying overnight and I believe they will establish support at these levels. Mega cap tech companies will reaffirm their capex in AI when they start releasing earnings next week. TSLA will report after the close today. The big market drop from last Friday had no follow through selling. An SPY drop to the 100-day MA looks less likely and given the news, I doubt we see a capitulation low in SMH. This is the last week of seasonal weakness and now the market will shift to a period of seasonal strength. My conclusions are not just based on SPCX earnings. TSM posted incredible results last week and cited an increase (not a decrease) in chip demand. As I've been saying, I believe the drop was caused by weak hands buying these stocks on margin and they were shaken out. Sellers were not able to push stocks lower this week and the selling climax I was hoping for failed to materialize. Swing traders, this is a good place to sell some OTM put premium and to buy some of these stocks. Don't lunge, take starter positions and add on strength. Make sure you pick stocks that are not reporting in the next week. Earnings season is going to ramp up and we will hear from AMZN, GOOG, INTC, KLAC, LRCX, MSFT, META, SNDK, STX, TSLA and WDC over the next 10 trading days. We've waited patiently... it's time. Day traders should look for a rotation back into tech. QQQ is above the 100-day MA this morning and that level needs to hold. SPY is above the 50-day MA. We are likely to see a brief bid check on the open. That will give you time to observe chip stocks that are gapping up. They need to show RS and hold the gains. If they do, start scaling in and add on a new high for the day. Global markets were up so there is a slight tailwind this morning. Support is at the 50-day MA and resistance is the open from last Friday ($773.25).

More Pain Ahead - After heavy selling Friday, the market gapped up into the prior day's range. That pattern is common. Buyers tried to push the SPY above the 50-day MA, but it was rejected yesterday. This morning the market is trading below the low from Monday and overseas selling is providing a headwind. We are in a period of seasonal weakness for another week and I don't believe we've seen the low. These moves end with a bang, not a whimper and I am watching for a a deep drop and tall bounce. That would signal a selling climax and a meaningful short-term low. Until I see that, I am holding off on longs. France had over 500,000 protestors and a curfew was imposed. That social unrest has spread to Italy, Belgium, Spain, Portugal and Albania. These demonstrations are no longer isolated, they are organized and they are spreading. Bond yields in the EU are rising and their markets are down again. Having traded through the financial crisis I can tell you that the ECB is weak and fragmented. Each member nation protects its own interests and the deficit spending is almost impossible to reign in. The US runs large deficits too, but we are one country and by comparison, the Fed is unified, making policy decisions quickly. At some point, the house of cards will crumble, but trying to predict it is foolish. Credit is not an EU problem, it is a global problem and every developed nation has contributed to it. When it's time, price action will tell us when to favor the short side. Investors hate uncertainty and the unrest in Europe will weigh on an already fragile market. Semi conductor stocks bounced yesterday, but most of those gains were given back. Alberta voted to remain part of Canada by a wide margin. That should reduce uncertainty. It might seem to many of you that I am discounting the current events. I've traded this same pattern dozens of times. From August - October, the skeletons come out of the closet and fear surfaces. The market sells off and then it rallies into year end. Each time, traders convince themselves that "this time is different". What if this time is different and the market tanks? Then I won't buy. I expect more weakness and it will establish a nice support level in the next week to ten days. I need to see a nice tall bounce on heavy volume off of that low. If the market can't challenge the all-time high in December, my bias would turn more bearish for 2027. Strong tech earnings and continued AI spending is the cure. We will start hearing from mega cap tech companies in the next two weeks. We have major news pending. Keep your risk low and let's wait for that opportunity to set up. From a day trading standpoint, focus on group rotation. There will also be earnings reactions that we can trade while we wait for the news. I sense that we will see more weakness today. SPY is below the 50-day MA and QQQ is below the 100-day MA. Support is the low from Friday and resistance is the 50-day MA.oneoption.com/daily_bulletin…

Not So Black Monday - Many "gurus" were calling for it, but they have been bearish for years. Last week tech stocks sold off hard. This has a liquidation feel to it. When prices drop suddenly like this it is usually margin related. In June we saw a similar rotation out of AI stocks and we learned that a $45 billion fund went under. We have another week of seasonal weakness to get through and I don't believe we have seen the low yet. Over the weekend, protests in Paris have investors nervous. Bond yields have been rising steadily like they have been around the world. Structural debt and spending deficits are coming home to roost. We all know this is a house of cards, but trying to time when this is all going to manifest is futile. We will wait for price action to tell us when it is time to shift to a bearish stance. I limit my analysis to the next three months. We are traders and unlike major institutions with billions of dollars to move, we are small and nimble. That is our edge. There could still be some nervous jitters this week as AI speculators get flushed out. By the middle of next week, we will start hearing from mega cap tech companies. After that, the mid-term elections will be upon us. Any weakness should run its course before then and support will be established. That should set up a buying opportunity into year end. That is the most likely scenario I see setting up. From a swing standpoint, we have to wait for these earnings releases. We need to see the reactions and we need to get those announcements behind us. Trying to swing trade during the peak of earnings season is like walking through a mine field. I will be watching for a capitulation low in SMH. Semi conductor stocks have been hit hard and there is probably going to be another leg lower. Moves like this rarely end with a whimper, they end with a bang. I have some tech positions that are underwater but they are small and my overall exposure is very light. I'm not concerned and I expect them to rebound once the lows are in. Day trading has been excellent with nice sustained intraday moves on both sides. Earnings releases will provide us with a lot of opportunities. I would focus on short-term trading for the next two weeks. I feel the bounce this morning is vulnerable. Global markets were down overnight with Europe down more than 1%. This will provide a stiff headwind. Watch for a wimpy bounce with mixed overlapping candles. Once that move stalls, watch for an opportunity to short. If the market instantly reverses the gap up with consecutive long red candles, we might have to take shorts earlier in the session. At minimum, I am expecting SPY to test the 100-day MA in the next week before we see any meaningful rally. Support is the low from Friday and resistance is the 50-day MA. oneoption.com/daily_bulletin…

Margin Calls Trigger Market Sell-Off: What To Do Now. In this video I discuss the drop in tech stocks last week and the opportunity that is setting up. youtu.be/lEZoBM96aJQ?si=ZRzj… via @YouTube

AI Stocks Finding Support - Your primary trading thought these days should be that the market is trapped in a horizontal trading range. There is no trend and that is nice likely to change until the mid-term election results are known. Mega cap tech earnings will start in less than two weeks and we will hear from more groups next week. The economic calendar is very light next week. With regards to semiconductor stocks, TSM posted a great number. The selloff in these stocks is not about valuation. TSM trades at a forward P/E of less than 20 and that is cheap for a stock with revenue and earnings growth greater than 50% Y/Y. Net profit margins are also above 50%. Some fear a slowdown in data center capex. That is not consistent with what TSM reported and it is not consistent with what mega cap tech companies are doing. The drop in price has to do with staying power. Investors have piled into these stocks and margin buying is at record levels. Institutions are trying to shake them out and I believe this will set up a great buying opportunity into year-end. Selling OTM puts and put spreads is the best way to approach these stocks. The IVs are high and you can distance yourself from all of this volatility. Sell them below major technical support levels and take advantage of time decay. Your exposure should be fairly minimal at this level, but the time to put trades on is near. QQQ bounced off of the 100-day MA yesterday and we want to see that support hold. I will be taking assignment on AXTI today on the $65 puts with a net cost of $62. I am going to hold the shares. I have not sold PENG puts or the MRVL put spread from my last video, but I am preparing to do that once I see support. The market is trapped in a range and this is not a time to place big bets. We need a breakout and follow through. Earnings season is ramping up and that will present opportunities for the next few weeks to day trade. The volatility has been good this week. Wait to see if the opening move has directional strength. If it does, join it. If the candles are mixed and overlapping, it is likely to reverse and your first window will be to catch that reversal. The market is not going anywhere fast and we are right between the 50-day MA and the all-time high. Programs are dominating the action and the market could go either way during the day. Support is at the 50-day MA and resistance is at the all-time high. When you can't get a directional feel you have to keep your trades small. Overseas markets were up nicely so there is a tailwind today.oneoption.com/daily_bulletin…

Weak Hands Will Be Shaken Out - The tech sell-off has gained traction the last few days and the speed and depth of the move feels like another liquidation. In the US, margin buying is at record levels and it is up 40% in the last year. These investors are not buying MCD, they are buying AI stocks. This is happening elsewhere as well. From trough to peak, the tech heavy KOSPI Index (South Korea) has a range of 166% in the last year. Chip maker Samsung accounts for 27% of the index. Margin buying hit record levels in South Korea and the index is down 7.5% overnight. This isn't a matter of fundamentals, it is a matter of not being able to meet margin requirements. Once these stocks roll-over, everyone hits the exits at the same time and the bottom drops out. Institutions are very good at spotting vulnerability and they will give assets a push in that direction to get the ball rolling. There is some concern that the data center buildout is going to slow and that companies will find it difficult and expensive to raise capital. TSM said that they do not see a slowdown and they reported incredible earnings this morning. Revenues were up 41% Y/Y and they are projecting a 58% increase next quarter. EPS grew 55% (diluted) and net profit margins hit 51%. These are incredible results and the stock is down 5% after the release. The EPS for 2027 is expected to be $22 and that means the stock is trading at a forward P/E of less than 20. This is cheap for this level of growth. The drop in these stocks is not a matter of valuation, it is a matter of staying power. The market has been trapped in a trading range and we are in a period of seasonal weakness. That is why we have been treading cautiously and not taking many positions. Selling rich put premiums in this group has worked well this year. We have been selling OTM puts and holding half of the strike price in reserve so that we can buy the stock on margin at much lower levels. I have two positions that I am taking heat on. ALAB was a put spread and it still has a week left until expiration. The strike prices are $2.50 apart on this put spread so my risk is limited. I am not going to adjust the position, but I might trade the stock. I am short the AXTI $65 puts @ $3 that are likely to be assigned and my net cost on the stock will be $62. I am very comfortable buying the stock here. I do not have a position in PENG or MRVL, but I am looking to sell some OTM puts when the group finds support. From my perspective, this drop will eventually set up an incredible buying opportunity into year end. Being cautious and patient when the market is not giving us much to work with is going to pay off. I would not be surprised to see SMH trade down to the 200-day MA. When we have forced liquidations and panic selling, the moves can be fast and very deep. I will be waiting for signs of a capitulation low in these stocks. I will NOT buy calls, I will sell OTM puts. There could be after shocks. This is how I plan to swing trade in the next few weeks. The market rally has been narrowly based and that is a longer-term concern. Mega cap tech stocks have been lifting the market. RSP, DIA and IWM tell a very different story. We need to see rotation into other groups like financials. From a day trading perspective, it is rare to see back-to-back big drops. QQQ is going to gap down big and I would NOT chase this move lower. Instead, I will be watching for a nice deep early low in QQQ (perhaps down to $703) with immediate stacked green candles off of the low and relentless buying. There might be more downside in coming days before we see that pattern, but when I see it, I will day trade the bounce and I will sell OTM puts. Your patience will payoff, don't abandon it. Let's see what happens today. PPI was hot this morning (1.3% increase M/M), but that was priced in. SPY did not move much after the release. Support is the 50-day MA and we are below it. The next support level is the 100-day MA and it is withing striking distance. Resistance is AVWAPQ. oneoption.com/daily_bulletin…

Inflation Sparks Selloff - I want to see SPY hold the $775 level and TLT to hold $78. If they are breached I would not trade the long side. PPI will be released tomorrow. Semi conductor stocks have been selling off and SMH (semiconductor ETF) has shed 10% in the last week. TSM will report earnings before the open Thursday and it will set the tone for the group. I believe that earnings will be good, but much of the data center grow is dependent on raising capital. Borrowing costs are rising quickly. In general, I don't like that a huge percentage of stocks are not participating in this rally. We can see that in RSP, DIA and IWM. Those indices have been drifting lower and I don't consider this to be a healthy rally. The market is likely to stay in this range until the mid-term elections. That event coincides with mega cap tech earnings and this could be a spooky Halloween. I like selling OTM put premium on strong stocks and distancing myself from the action. With earnings season upon us, this is a time to keep swing positions to a minimum. There will be tangent reactions and the number of opportunities is limited because most companies will be reporting and we don't hold positions over the number. From a day trading perspective, I would focus on the SPY and TLT levels I provided. If both are breached early and if there is not much of a bounce, I suspect that we could see a bearish trend day. The price action on shorts has been more consistent than it has been for longs during the last week. The best set-up would be a meager attempt to get into the gap this morning with mixed overlapping candles. A quick smack down would indicate heavy selling pressure and that first move will give us time to find stocks with relative weakness. A fast drop would be more difficult to trade and I hate chasing gap and go formations. I would prefer to wait for a bounce and short that when it falls short of VWAP. Near the all-time high I don't believe buyers will be very excited after this news so I am not expecting a gap reversal with stacked green candles. The odds favor the downside today. Support is at SPY $775 and $770 (AVWAPQ). Resistance is at the low from yesterday ($775.95).oneoption.com/daily_bulletin…

Control Your Emotions While Learning How To Trade - I just posted an article on the best way to do this. reddit.com/r/stocktraders/co…

Inflation and Earnings In Focus This Week - The market is flirting with an all-time high. Last week bonds found support and that bounce will be tested this week. CPI and PPI are likely to rise with oil prices remaining high. We will see if that causes interest rates to creep higher of if bond buyers view this low as an opportunity to lock in those higher rates. Keep an eye on TLT, it is important. Bank stocks have been drifting lower as yields rise and employment stumbles. They will start reporting this week and XLF bounced off of the 200-day MA last week. Banks have room to move higher and the market needs help from other sectors if it is going to make a new high. To this point, the SPY has benefited from mega cap tech strength. If you look at RSP (equal weighted S&P 500), you can see that the move higher is narrow and that the majority of stocks have not been participating. Today is a banking holiday so the action should be relatively dull. Buyers and sellers have been largely in balance since June with the SPY rising 2.5% in the last five months. There is a slight upward bias. I am expecting that to continue into the mid-term elections. We still have two weeks of seasonal weakness ahead of us. After the mid-terms we should have a meager year-end rally that takes us to SPY $800. The best swing strategy is to sell OTM puts on strong stocks. The weakness in semis and other AI stocks will set up a nice opportunity. The IVs are high and you can sell puts below major technical support. You do have to be selective since some of these companies will report in the next two weeks. Make sure that your puts/put spreads don't span earnings. Day trading has been day to day. The steady price action Friday came as a bit of a surprise. The volume was light so it was not a powerful move. Overseas markets were up. SPY almost reached the all-time high overnight before backing off. It is close to it and that level will act as a magnet. Be mindful that this is a bank holiday and that a sustained directional move is less likely. Support is the low from Friday and resistance is the all-time high. oneoption.com/daily_bulletin…

Bond Yields Just Peaked: Here's What To Buy Now - Full market analysis for the week ahead and a new trade. youtu.be/6th_YmV0kLQ?si=7OOt… via @YouTube

The Market Feels Terrible - Remember This Lesson! - Here are some of the recent headlines: "The Fed is going to hike interest rates. Oil prices are rising. Inflation is high. Our national debt is spiraling out of control and no one wants to buy it. The AI bubble is going to burst. The war in Iran is dragging on." The more negative the headline, the better. They've swapped out their old standby of global warming for their new favorite. "AI is going to destroy mankind." Watch this one gain traction in the next few years. How is anyone supposed to invest or trade when the future looks so bleak? Realize that the media feeds on fear. They generate ad revenues when they have scared and dependent viewers. Ignore all of this bullshit and focus on price. The market has "weathered" all of these headlines and it just made a new all-time high. Should any or these issues come home to roost, it will first be reflected in price. If AI does destroy mankind at least I will die rich, because I am buying these stocks until the price action tells me not to. Price is telling me that TLT has made a short-term low. Bonds tested support three times after an accelerated drop. Moves of this magnitude are not that common and I have been watching for a capitulation low. I mentioned that the price action Wednesday was constructive, but that TLT needed to close above $77.60 yesterday. It did that after the FOMC minutes were released and after two successful bond auctions. This is important because rising yields have kept a lid on the market. If bonds find support, the backdrop will be set for a year-end rally. Earnings season starts next week and strong profits have kept the market afloat while yields have been rising. Seasonal weakness will last two more weeks. Mega cap tech stocks will report days before the mid-term elections and that is the next major "window". Until then, I expect to see the same choppy trading conditions. Sell out of the money puts and put spreads on strong stocks. AI has been volatile and the IVs are high. If you sell options on these stocks you will be well-rewarded, but you will be tested. Risk and reward go hand in hand. These stocks are volatile. One day they look like they are going to the moon and the next they are in a freefall. Focus on the long term chart and not the day to day price action. I would NOT suggest buying calls on these stocks. There is no market tailwind. Selling OTM puts is the way to go. Day trading is challenging because there is no D1 market trend. Keep your size small and try to find a group that is in/out of favor. No matter how good a move looks intraday, know that it can reverse. Take gains when you have them and be nimble. Support is at SPY $775 and resistance is at $779. oneoption.com/daily_bulletin…