August 22nd Daily Market Note: Pre-Earnings Rally in NVDA becomes contested and lack of market leadership stalls rally
Premium Daily Note: August 22nd, 2023
Note: Private Group Chat for Members is now ready - link here. When I see attractive setups, I will share them real-time in the Private Group Chat. Like I did here for Dick’s Sporting Goods.
Dick’s Sporting Goods has gone absolutely nowhere today. Yet our position is already up 20%. I use probability and statistics to find ideas that I believe have positive expectancy.
That setup was freely given to the public on Twitter because of the public’s tremendous support for my work. Keep sharing my content, and I will have more good things for you! Make sure to follow me on Twitter!
Daily Market Note below.
Daily Market Note: August 22nd 2023 by Larry Cheung, CFA
Pre-Earnings Rally in NVDA becomes contested and lack of market leadership stalls rally
Forward-looking Conclusions of this note:
Macro: The U.S. Retail Sector is spooked by Dick Sporting Good’s profit warning and aggressive slashing of prices to clear out inventory. Retail is one of the most important sectors in the S&P 500 as it conveys consumer confidence. My entire coverage list in Retail is impacted in today’s session with losses ranging from 2-5%. My Sell Put positions in DG/DLTR/FIVE are being impacted, but I stay confident in their longer-term positioning within Retail.
U.S. Stock-Specific: Earlier today on Twitter, I provided a Members-only idea to the public (since Private Group Chat was formed later in the day) on Dicks Sporting Goods $DKS Strike 80 January 2024 being a compelling setup at time of entry. As of this note, the premium on this option has already depreciated 20%, netting us Sellers a 20% unrealized gain. I’m holding this position as it will take enormous selling force to get anywhere near close to 80, and any recovery at all will completely evaporate the options premium.
Bonds: I believe the 10Y Yield is now finding a new equilibrium for the coming days in the 4.3%-4.35% region. A breakout past 4.35% will bring increased pressure on broader markets.
China: With policy makers stepping in to halt the depreciation of the Yuan, I believe a stable CNH/USD will eventually be translated to higher prices for PDD, TCOM, EDU, and BABA.
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