Market Volatility | Mike Follett | 10-15-19
A. Good. Afternoon market. Participants. And welcome, to our session on market volatility, just. Experimenting. A little bit with the start time so we may actually be starting slightly. Ahead of the top of the hour when we normally do but I think. Everybody will be ok with that as long as we've got the stream working and in. Anyhow it's good to be here my name is Mike Follet and you found your way to market, volatility. Where. We talk just about all, things market, volatility related, and. That's what we're gonna do today there have been some, significant. Potential. Changes, in, markets. Perspective on volatility, and we'll, analyze that, by looking at the VIX and what, really might be driving, market. Prices, as a result of today's. Activity. And there certainly is a lot to talk about so we'll get to that all. Right but if you would like to follow on Twitter, you. Can go ahead and hit me up at M Follet. Underscore. TDA also. Just in using, this technology, and participating. In these webcasts. Be. Aware if you hit, the subscribe button, it'll. Be at the bottom of your window panel. You know where you're viewing this right now that's. Just a good way to further. Participate. In the channel, you can actually be, notified, about live, classes that come up and also. We're. Grouped into playlists, with all the archived webcasts. Based, on the topic so it makes it really easy if, you just go to the actual channel by. Subscribing to. It, it. Just makes it really easy to find whatever classes you're looking for especially in those archives alright. So, let me go ahead and hit these disclosures, and we'll, get right to, it by the way it's, good to see everybody out there and welcome to the session especially, if it's your first time I hope, you enjoy the ride and hope, you get a chance to come back but remember that options, are not suitable for all investors there. Are risks inherent to trading options. That could expose an investor, to potential, potentially, rapid, and substantial. Losses also, futures, and futures option trading that, is considered, speculative. And it's not suitable for all investors make. Sure you understand, the risk disclosures. For. Both options, and. And, futures. Just remember these products, do carry a lot of leverage and depending on the strategy, you choose you. Could actually lose more than you actually invest so just be aware of that, also. In order to demonstrate, the functionality of the platform, and that's one of the things that we like to illustrate as, we go through this class just show off some various. Functions. That are available and, there's actually some new functions, out there that you might not be aware of and, I'd like to introduce you to at least one of those today, but, we'll use a paper, money, account, to do that and as, we use this paper money account as we take a look at examples, I'd, just be aware that they're not recommendations. And any investment, decision you're making your self-directed account, is solely your, response, or solely. Your responsibility paper. Money is for educational. And illustrative, purposes only and this. Webcast, will discuss, things like volatility. And technical, analysis, but, other approaches, including, an other approach like, fundamental, analysis, they might have Purinton. That's, fine, supporting. Documentation, I can, be made for.
Any Claims upon request also, trades involving minimum. Profit potential can be significantly, impacted by any transaction. Costs, remember, those transaction, costs, are a thing, to remember in your trading because they can't impact return, and. Past, performance does not guarantee future results. Probability. Analysis such as probability, of an option being in the money that, does not reflect. The guarantee, of an outcome, looking. At historical, data like back testing, that's let's, looking at the past and of course the future might be different than what the past has helped no. Soliciting, no recording, no taking pictures no part of this presentation should be rebroadcast, without. The written consent of TD Ameritrade, and just. Remember that investing, does involve risk there's. A quick reminder. About transaction. Costs and commissions zero, commissions on online US, exchange, trade listed, stocks ETFs and, options. $0.65. Contract. Fee on those option, trades. Okay. So also, one, more thing Delta, Gamma theta, there's, your definitions, for those and those are measurements for an options price sensitivity, to, changes in price time, and implied. Volatility. So thank you as we go through those disclosures and let's, get right to so, I probably you, know I'm thinking that the number one thing to talk about or the first thing to, talk about in today's class, is just what's happening, with the market, prices today in, case you haven't been watching markets. Really. Over the past week, the. S&P 500 has, had a really. Strong move to, the upside of course, if you're wondering what, I'm looking at right now I'm looking at the es the. S&P, e-mini future. For. The S&P 500, and, in. It's, just a you know it's a way to look at the, S&P big cap stocks but, really over the past week we've had a monstrous, move to the upside just, in general and, some. Traders might look back and say well that was sort of a double, bounce here, off about, this 2900, and then a breakthrough, 2950. There might be just a little tiny bit of a, double. Bottom that. Maybe has formed, right there in the, S&P 500 and without, even testing maybe. Some resistance, at 29 50 we're actually just charging right back up, however. Next. Up to the upside and this is something that many traders are watching, is, going to be that 3,000, handle right the S&P getting, into that zone of 3,000. On, these futures, here that's, an all-time, high at three thousand twenty nine and a half and so, we could be getting into a zone, of resistance. So we've got these markets, that bigger-picture have been kind of you, know relatively. Sideways, for about four, or five months now. Recently. Though we've had a big charge move to the upside with that double bottom kind, of the short-term movement that we're seeing here so that's very bullish but.
Still There's, kind of that lingering, resistance, out there kind. Of at these high levels above 3000. So that's something to keep your eyes peeled for because, sometimes. When markets, get near, some, resistance, like that they start to become a little bit more volatile. That's an old adage that, some, traders I use that markets, tend to become more volatile, at the, turns, which. Means there could be more fighting. Back and forth and maybe a little bit less bullishness, on. The horizon, as we if, we do get closer to that 3000. Number and of course anything can change I mean the markets could definitely reverse, for one reason or another but, part of the reason why the, markets likely. Are charging. The way they are is there's. A little bit of optimism. And a little bit of Hope on the trade deal horizon. Right, still if you ask me there's, a lot of ambiguity. If. That's the right term but kind. Of clarity missing, but in. Terms of you, know trade. Outcomes. Trade deal outcomes, but remember, we had the meeting last week between President, Trump and, certainly. Advisors. On the US side they got together with the Chinese, delegation. That came over and and apparently there were a lot of positive, talks, you. Know there, were some comments about a trade deal being done, but. Really I think what it kind of looks like is more or less a, truce. To the trade deal with, needing, clarity, about an actual trade deal outcome, so when you're thinking about market. Events that, could coincide with maybe. Resistance. And I'm not saying that this is gonna happen but, it'll be interesting when, the market starts looking, for maybe additional, information. You know more color or more clarity, about what's. Happening, with trade if that, doesn't correspond, with right, around these resistance, levels and if, the clarity, happens, right and there's optimism, about okay. We know what's happening, and there is a truce or this is the start of an actual trade deal you, know who knows maybe the market charge is higher and if. The lack. Of clarity returns, or if people think it's a fake-out that, could be the level right around 3,000 where the market reverses, and goes back down again but, just especially if you think about how, them how, market. Participants. You know sometimes you'll see price move, higher like this but, you don't get much confirmation. Especially, from the option, market potentially, that, they're that they're very confident. In this move, one. Way you can, sort of confirm that is by taking a look at VIX right this is the volatility, index and, just so you know the. Schedule, today you know I forgot I just jumped right in I forgot to tell you the agenda, I did, want to take a look at the current situation of broad markets, I think were stepping back and looking at not right now and I, want to step back and look at the market volatility. Really. Were talking about VIX when I use those terms on these broad markets, because, there have been some, interesting events. Kind. Of play, out here on VIX and then. From there, we'll, talk a little bit more in detail about things on the horizon what's, coming up this week that, could change the patterns of what we're currently seeing, in the market and that, is gonna lead us to some economic, events discussing. Those and then, looking at what's happening with earnings, because, that's another big factor that, the market is dealing with right now and day number one really, of this earnings season. Really. That kind of traditional, day one where we're getting this big slew of financials. That are reporting, earnings it's, interesting to see the way the market is absorbing, that data on the earnings front as well, but, all that thrown into a blender, is. Really, what's giving us you know the happenings, in the market right now but there are some things that could change on the horizon so I just want to make you aware of all, those things okay, but anyhow taking a look at the VIX one.
Thing That we saw today and, this, is after, the markets already made a pretty good run, and. And. We got a bunch of earnings announcements, from from a number of the banks and some, of the earnings announcements, were actually kind of mixed if you AskMe looking at those reports, now, I'm not recommending where, these stocks should go or what a good earnings announcement, is versus isn't, but. There was some good and bad in a lot of these earnings announcements, and we'll, take a look at some of those for example but. It seemed like the market, took it in stride, especially. When we're talking about kind. Of the fear index this, vixx, vixx. Actually, dropped very, significantly. Today VIX. Was down about 7% so, that's over a point and note, this VIX has dropped all the way down to the. Lows that we had last month, so, this rally that the market has had the. Market, itself, market, participants. Are really. Getting a lot less, fearful, about those, other economic. Things that could mess up the Mojo so to speak but. There is one thing to keep your eyes peeled on and it's, kind of interesting the way this can line up when you're talking about volatility, and combining. That with what you're seeing on broad markets, VIX, is down and it's testing, the lows that we saw from last month. Coincidentally. We're getting to the levels where markets, are peaking. In previous. Months we're still a little bit below that level but up around that 3,000, handle and so, we've got a couple of things coming together here, right we're getting a lot of confirmation. Here with VIX falling, that traders are getting comfortable, with this move but. Still there might be a fairly significant, barrier to volatility. Down here at 13 and a half and it might be this could be some worth watching this coming, this week right if, the markets continue, their rise higher and they're able to break through that 3000. Handle and, volatility. Actually. Drops below this 13 and a half those. Two things might be confirming, you know more strength ahead for markets, and. That's one thing that as the market has reached. 3,000. In the past right, the, previous, instances, where we've gotten to 3000, they've, sort of correspondent, with markets. Volatility. Not. Dropping, below that 13, and a half level so keep your eye on 13, and a half there on VIX and, again VIX is just a reflection of option prices. When. Option prices are going down in value generally, speaking on the S&P 500 VIX, Falls and that just means that people are paying less to. Buy insurance to. Buy puts basically. On their, on the broad markets, and so, why are they paying less to do that well maybe there's just not as much fear and all that could change but. It is sort of significant, the way these there's sort of a confluence of price on the index and current. Levels of volatility, right now now, the S&P, wasn't, the only index, that was up today, some, things that might be worth noting here Russell, 2000. Which, has been, the laggard, today. If I'm not mistaken it. Was the, index, that had the greatest strength, you. Know out of you, know big caps like the SP, and the Dow and. In. The Nasdaq, versus the small caps the Russell 2000, the Russell 2000, actually had.
It Was the well it tied with the Nasdaq basically, for the best-performing index, on the day and that's something that could be a sign of increasing. Confidence in markets as well because. Remember when. Small. Caps when, they start, to gain strength that. Could be a sign of the appetite, for risk from broad market participants, right the, the, market, really. When you're thinking about market, risk one. Way to define, that, the, level of risk or the appetite, for risk is for, looking at things that generally. Have. More volatility, or excuse. Me the Russell. 2000, typically is a more volatile, type of index it's. Smaller, caps, so you've got companies, that have a little, bit more growth potential, but also a little bit more uncertainty. With the actual business because, they're smaller companies, and if, the market does gain, you. Know you. Know confidence, and investing, in those that. Can be a signal for depth. Of appetite, for the for risk in the market in general right if the market is craving you, know buying stuff that tends to be viewed as more risky, that could be a signal to overall. Mart overall market strength but the Russell 2000, does have a way to go just, to even test it ties in wresting, lee enough though it's near the bottom of a range so, there could be momentum. There could be space. Here for the Russell 2000, to continue to go higher but. Overall based on what we're seeing, from. These indices is that we're in a fairly bullish looking, market, maybe, some weirdness. Because, volatility. Is matching, SMO blows and big, caps are reaching, some, old highs and, speaking. Of other. Indexes. The, Nasdaq, this is a look at the. /nq. And. The Nasdaq, well, you can see the the, price action right there looking. Very strong as well if you, wanted to keep your eye on volatility. For. The Nasdaq 100, you. Could always take a look at the V X n that's. The Nasdaq. VIX and I, did think it was worth looking, at that today because VIX. On the Nasdaq, is also, right at the lows that we had last month. VIX, is not quite, at its previous highs but. Volatility. Is is already all the way back down to some. Of the the recent lows at least in the last three months that could be some to watch as well do, we bounce back up on volatility, that could be a sign of caution. And possibly a pullback. In. Markets, or at least in Nasdaq markets, or. Do we break through some, of these lows on volatility and that could give more of a confirmation, of strength but, if you know this, is a class on volatility, right. So keep your eye on some of these. Volatility. Indices, as well as these broad markets, it might be worth your time, you. Know especially if you like to keep your eye on options, you know but within these, broad markets, there. Were some definitely, some stocks that were moving today just. To give you an example, you know when you're talking about stocks, that are Nasdaq, related. NVDA. Nvidia. They. Had a pretty. Big move today in fact in video was up about. 5%. And, you, know what let me go ahead and, change. This chart view for just, one second, actually zoomed, out a little bit but. I think it's actually, maybe. Worth taking a little bit of time on the, big board and sort, of talking about Nvidia, here for just one second, and the, reason I wanted to mention this is because, when. You take a look at what Nvidia, did today and of course all, have closed. Higher than some of these high. Watermarks, from all the way back there and when, you take a look at what the stock is done over, the last six, months there. Was a whole lot of consolidation, happening. There between. Some of these highs and lows and this, breakout, some technicians, might, actually view that as you. Know some sort of a price pattern, breakout a very. Aggressive. Trader, might say well if they measure the distance between the. High and sort, of the low of this pattern I'm sort of generalizing. Right there but, that is in the neighborhood, of about well. Any thirty to thirty to forty ish points, I don't, mean to be overly, aggressive on. That but, some traders might think that's good news for maybe the stock going back. And eventually. Testing. Some of these highs out here now, what, you, know what caused maybe some of this movement on NVIDIA. Today and oftentimes when you get big moves like that. Especially. If you're really focusing, on market, volatility. It, might, be worth stepping, back and, actually. Taking you, know a look at news and seeing, what's what could be driving some, of this price action here, because. You, know this you, know news headlines. Things like that will get traders. Trading. And you, know if you take a look at some of the headlines these, guys had some price upgrades, today you, know you can't you can't really say that they got analyst, upgrades, necessarily.
But, A couple of analysts, came through today and I don't know if you've never noticed, this before sometimes. When you look at your individual, stocks. But. Let me let, me just show you what I'm talking about here I'm, gonna take my second. Scratch pad over here I'm gonna switch that gadget and take it over to the take. It over to live news, if. I can find the live news there and. Then if we link this by the way to red which is what our charts link to it'll actually, update. The news on the underlying, as. Well, as we're. Looking at the chart on it but if you go through some of the news and this is where you can get a lot of the updated information about what could be driving the stock but. You're gonna see some headlines in here about price. Targets, being raised by, actually. There were a couple of different analysts, that, raised their price target, on the stock and now, it's, kind of weird because these analysts, didn't necessarily. Minoo. Raise their opinion, of the stock and they didn't necessarily upgrade, the stock they just lifted their price target, sometimes. That, will happen but. If you get a bunch of analysts, that are collectively, raising. Their price targets, on a day. That's generally, bullish sometimes. You get those big explosive, moves and one, of the reasons you know from these analysts, they're they're quoting as to why they're. Raising their targets. On Nvidia here is because, they expect, you, know some high demand, in artificial. Intelligence chips. And that's one of the areas, where. Nvidia tends to shines they've got those different, types of computer chips those. GPUs. That are effective in terms of processing, very complex, calculations. Some. Of you out there probably know a lot more than I do about this, but, especially on the artificial, intelligence speech. Recognition, basically. Programs, that are designed to where if you're talking to it it feels like you're talking to another human being right. They know how to recognize voice. Patterns, your, speech. Inflections. All those types of things but anyhow that's, kind of especially. In call center environments, there. Could be a lot of demand for that and a lot of these analysts, are actually quoting demand for, these types of artificial intelligence chips. Now that being said you, know there's a lot of risk with the stock the stocks already had a big move higher it, tends, to be a volatile stock anyway, so, you know many, traders are going to temper their enthusiasm. Against. Thinking the stock is going to go straight up there but, significant. With the price action and also the confluence, of some pricing upgrades there so, for those of you who are wondering about things that drive stocks, here's, a learning point for you you. Know there was no earnings on Nvidia, today there, are a lot of earnings out there but, there was no earnings here there, was no analyst, upgrade, but if you take the time to maybe look at the news sometimes. You can uncover those headlines. About, price, target. Increases. And if you get a bunch of those together, sometimes. That's enough to make the stock have, some momentum higher in, fact one of the price target increases, was. Expecting, the stock to get up to 220. They raised their target, from below. 200, to 220. And it's interesting because that, could be some technical, resistance up there, at 220 also, but, anyhow, interesting, price action there on Nvidia. Also. When you're talking about you, know some big cap stocks you, know just going back to the SPX, or the S&P 500. You, know there were a number of big big, cap stocks that were moving higher as well, today in fact, one that really kind of stood.
Out Today on the SPX, I think, it was the biggest mover on the SPX. ANTM. So. They is anthem. These guys are benefits. Providers, health care benefits, providers, essentially, right they, put together different. You. Know plans kind of like United Healthcare that, type of thing and. I don't mean to sell it short by just giving you some scab, details, there but if you take a look at this stock they, did not report, earnings today but. They certainly, got a big, move, higher in fact this stock was up, 6%. Today. And, and. That might be indicative of just some things that were happening in general right, healthcare, related, stocks were quite, strong, today, and, if you notice a lot of these names and you know just keeping the chart right here on anthem, they, have been really, beaten, up over, the last three, months or so and a, lot of traders, are kind of quoting, that. There, could be some, fear, about. It I don't mean for this to be a political argument but there is some political, risk, here. About. Maybe some of the candidates. That are you. Know on deck for. Presidential, election, from the left talking. About you. Know universalized. Whatever. You call it healthcare. Anyhow. Affecting. These types, of companies that are in the business of putting together these health insurance plans, but. Anyhow that's really been a drag on these companies. You. Know a possible. Threat to their profitability, but. Today it looks like they're kind of getting over that and note. This, UHC. United, healthcare they. Did, report, earnings today. And. For. Some reason, oh you know what UHC, UNH. Where, am I saying United. Healthcare they, did report earnings today and that. Could be part of the reason why anthem, was getting such strength coming through today is maybe, on some sympathy, of United, Healthcare here. We're seeing the same type of pattern here, right, stock, has been sort, of in this intermediate. Downtrend. But, today, it kind of looks like it's breaking out of that intermediate, downtrend, and so we could see you know some additional momentum and stocke course there could be downside, as well but. It, looks like the market liked the. Earnings report and just a quick reminder. Outside. Of just going through and, taking a look at headlines you, know what did they say about the earnings announcement. When. You're using the. Thinkorswim platform, technology. Here if you, just put your pointer, let me go ahead and close that left hand bar there. And I'm gonna zoom in here just a little bit but, if you put your pointer right on top of the icon, for earnings, at the bottom of the page here you're. Gonna see if you know some of this details, about that earnings it's not going to go into deep into, huge detail here, but, the estimate, the earnings estimate was right around 378. And they, came in today with an actual, report, of 388. On earnings per share so. That would be known as a, beat on their, earnings and a, lot of traders you know you get this idea of. Negativity. Political. Risk you, know headline risk against, a company sometimes. It's this type, of thing, the reality that earnings, actually. Are better, than maybe some of these reduced, forecasts. That, can be something, that could be a catalyst, to send stocks, higher so, don't forget that, what is your is you're looking at stocks around this earning season even. The previous dogs, if, if, their earnings are strong and if, there has been enough, weakness, in those, particular stocks or industry, groups sometimes. That can be enough to cause market. Rotation. To, occur right it basically, if things get down to a point of value and then, the company says hey this. Is what our value, says based on this last earnings report, plus if there's, positive, headlines about better, numbers, in the future those. Things. Coming together some, can really drive some, upward volatility. And some upward, momentum for the stock as, traders, try to adjust to. Kind of that news right adjust, and reflect into the current price of the stock maybe. New valuations. Based on reports. And expectations, that the company just delivered so anyhow that's, what earnings can do and you. Know healthcare in. In, general. Is quite, strong today a lot of the drug companies in fact here's a drug company. Abt. Abbott. Laboratories. It. Was quite strong today this. Stock you know still kind of following that same health care type of theme but.
They're In, more of like you. Know the medical drug, device, type, field here. Anyhow. Abbott Laboratories they, had a really strong day interestingly. Enough, though, they, have not broken, out of if we're talking about, trends. Here they've not broken out of kind of that intermediate. Downtrend, they found ourselves in, in fact, they got all the way up to you, know a line, that I just drew of course it could have been Mead drawing that line to. Match that spot but, kind, of sold off here intraday, but, you, know this might be worth having on the radar because, they. Have not reported, earnings yet, in fact their earnings announcement, is coming up tomorrow. Before. The market, opens, there, was quite a bit of enthusiasm, in the stock today but. Their earnings, are going to be tomorrow before, the market opens so if you're looking for maybe an, update. In. The healthcare services. Sector, as to. You. Know the health and the sentiment in that overall sector maybe, keep your eye on the way markets, react to their earnings announcement, tomorrow you. Know there were some headlines on the company, today that, could have driven some of this price action before, earnings, and in. One, of the headlines and this is something that has. Really been a, standout. Over the last couple of years for. Traders. And. I did write down some notes on this if I can find my notes if, I can't find my notes maybe I'll just have to go from memory here oh yeah here it is so two things, number one they're. In a new collaboration, with another company, here called. Tandem, diabetes. Care ticker, symbol as Tian diem but. Anyhow as part of this joint collaboration, they're kind of their. Goal is to offer some new beneficial, products, in the realm of diabetes, sugar, diabetes and, so. Abbott Laboratories they, actually have this technology, that. Can actually test for glucose, levels, really well right. And this. Other company that they're getting involved, with they're, really good at providing devices, that deliver insulin, or treatment, of diabetes and so, what they announced today was sort of a joint initiative. They're a collaboration. And so, that could have driven some of the price action higher about new you, know medical, opportunities. New, products, in in, this field that a lot of people really need so. Anyhow that's something could have driven the stock and then this one other thing and you, might notice this from. Other companies, that you, have seen over the over, the past years or so that, have actually performed well and that, is that they did. Announce. Another. Share buyback, program, three billion. Dollars. Worth of authorization. To. Buy back additional, shares of the stock and. It's. Interesting because a lot of these stocks actually, they're, getting smaller with all these stock buybacks, that are going on but, that's also been a theme that you know many stocks. That. Have been going up over the past few years have. Been companies, that have been buying back their own shares but. It's, it's sort of interesting three billion dollars, in terms of a new buyback and that's on top of they. Already had a buyback. Initiative. Established from 2014. Of three. Billion dollars that, one's almost finished, but a new program. Of stock buyback, of three billion dollars, so, anyhow this, is you know an area of the market that's very much been out of favor but. You know some traders might actually look at this as positive information coming, out of the space so. Be aware when, you're talking about volatility. You, know it can change you, know especially its impact on individual, prices, that. Volatility, can change stocks, and start, moving the company to the upside, okay. But they have earnings that are coming, up, okay. So anyhow, I just wanted to take a look at broad market sense of stocks that really, seem to be leaders. Within some of the broad markets, here's, one more actually before we move on are okay you I, bring. This one up because this was. Basically. The the darling, of Wall Street, for about six months where it went, what was it about 300% in terms of its price but.
Then It had a very, big sell-off, and, the. Stock came all the way back down to that nice round 100, level since, then it's actually been grinding, its way higher but. Today. Boom, it's really gotten a lift and of, course there, was some news accompanying. The stock and and. Part of that news is analysts, being optimistic, about. Collaboration. Where, traders. Are not traders, but viewers will be able to access their Apple TV through. Roku, devices and, anyhow. That, could help them overcome, some competition. Hurdles right. We talked about Netflix, which has actually got earnings coming up I believe it's tomorrow after the close and kind. Of the streaming wars, between, Netflix. Disney. Also. Apple, right but, you, know some, of these companies in light of the, competition, aspect that's. Been a drag on others you know optimism, about collaboration. Could be, creating opportunities, for others as well but, anyhow Roku, just. A smash hit today, and that, was up 11, and a half percent, there, on roku on some. Of the technical. Analysis. Side of things though I you. Know this stock could be getting to the point where it's in a zone of maybe resistance. And the, reason, I say it could be getting into that zone of resistance, is because. It was right in this ballpark let. Me just draw sort, of a line here. But. It was right in this range, where. The stock has had some. Well. Previous, support, but. Broke. Down from, in the past and I called, this a zone because, there's, just, kind of a zone of slop in there but, it's kind of gone up so much that it's found its way into that area of of. Potential. Resistance possibly. After this big move and you know some traders I you, know if they're thinking about hey the stocks had a big move up I'm not saying that this is for everybody, but after, a move up like that if somebody owns shares some. Traders may sell, calls as a, way to reduce. Some of the volatility, that could, happen in the stock if it goes down you, know this is not necessarily, designed as an option class but you. Know if someone is participating. In stock movement, to the upside, right, and they, own a hundred shares their. Exposure, to the price volatility, of the stock is, 100. 100. Per point they'd have a delta of 100, so, after, a move up what. Some traders do, is is they look for ways to reduce that, volatility, exposure, or, look for ways to reduce the, Delta that means they could sell-off shares, but. If they're not interested in selling off shares they could use an option, trade as a way to complement. Their stock and for, example if someone sold a call you, that had a 30 Delta, on a, stock, that they owned with a hundred, Delta, that, would actually reduce, at least for the next little while some. Of their price, volatility, exposure, in the stock would actually reduce that volatility, to 70 I don't. Want to get too far in the weeds there but, just some of these names have had a big move higher quite. Possibly, getting into a zone of resistance, and some, traders sensitive, to the volatility, in the, market, after a big move up look. For possibly. These areas, as a way to reduce, their volatile exposure, their, price volatility, exposure, and selling calls against stock is one way to do that all, right but that was another one that was really moving around on some headlines today, and. That was Roku, of course. You. Know traders, need to think about what, can change, sort. Of the overriding, sentiment, that seems to be happening in the market right now let. Me switch my gadget, over here and, I'm gonna take a look at a scratch, pad but. You know we're looking at these markets, and they're on you know more than a week-long run, and there's, some optimistic, headlines, behind, the market first. Day really, of earnings the market took it in stride I think out. Of the big companies that reported, earnings today there were six that beat their earnings and only, two that missed so, that's actually pretty good there's, some positive, sentiment, positive, headlines that are out there but. There are always. Headlines. Coming, up that could change, the. Mojo that the market is experiencing, experiencing. Right now so be aware of those things and so, what could create, change. Well, economic. Events, you know economic, announcements, could cause change, in broad markets, and just, to get this on your radar and you can actually view what. Economics. That announcements. Are on the horizon, you. Can actually go to the calendar, on. TD. Ameritrade, just the regular website, if. You navigate under stocks and go to the calendar you can view the, calendar on upcoming economic events of course, there is a calendar, here as well on the thinkorswim platform, if. You just go to Market Watch then, hit calendar, you, can actually, go.
To Econ, Oh day event, that's what they're gonna call it as econo day event, and for. Example, take, a look at I got to clear out my filter here but, take a look at what economic. Events might be coming out this week now, one thing I've noticed is on this page, you're actually going to see economic, events on more. Of a global basis right, you've got CPI, PPI. Numbers. But those are actually. From. The. UK, and possibly, European, markets, but, it's a lot of good information right, but if you wanted to boil it down to just what's happening on American. Markets it's. A little bit easier it's a little bit more clear to see that just. Go into the calendar on TD Ameritrade calm but, rather than navigating through, all of these let me just get it on your radar some. Economic, announcements, that are coming up this week. Tomorrow. We've got retail. Sales, you know that. Could be a big one because when. The market, kind of sold off a couple, of weeks ago and let's. Go back to the SPX, the. Drawdown that the market had back, here. Was. Quite, driven. On. Consumer. Sentiment. Numbers, right, is M basically. Is. M some of their services and, consumer. Numbers, that were coming out right and so, that has been kind of the in the mind of many analysts. One of the. Talking. Points has been that, hey the, consumer, still maintains, their strength and as long as that's their look. For an economy, to resist, recession, and look, for stocks maybe to continue, to work their way higher but. The market really started to worry about that back, here so, knowing. That the market did have a sell-off and it, was on some possibly, some fear about, the strength of the consumer, it might, be worth watching some of those retail, sales numbers that are coming out tomorrow, also, business, inventories. Are, coming out tomorrow. That, could be something. That could affect some, of those headlines, based. On whether or not inventories, are building enough or not that could be an indication of consumer. Strength are people actually buying, things or inventories. Kind, of building, up also. On the 17th, I, housing. Starts and also, building, permits so this is not going to be tomorrow but the following day that'd be Thursday, a, bunch of housing information coming out which is also kind of a tilt on the strength of the consumer, right. And, you, know a lot of these home builders have had nice runs, there's. Been a lot of optimistic, in the housing market keep your eye on some of those housing starts and building permits, numbers, that are coming up on the 17th but you. Know some some things on the consumer, side you, know how's the the. Consumer, being affected, right now and that, could certainly be something they could either stress, the markets again or maybe. Enough to ease the markets to maybe continue, to move a bit higher here so keep your eye on those by. The way you. Know there, were stocks a lot of them financials. They had earnings today just to get those on your radar in. Case you weren't looking at them. Blackrock. A lot of people don't know but this is actually the the. It's. The world's I think largest. Asset. Manager, it's, interesting because, in their earnings, they, actually, reported. That assets. Under management right. Now are six. Point nine four, trillion. Dollars. Trillion, with the tea and they, do a lot of the ETF's, you know they are the, investment. Company for a lot of the ETF, and different manage money types. Of products, they. Also noted that a lot of their etfs more their passive, products. Have actually had more assets, flow into those in the last quarter than, some of their manage money products, so it's it you know reading in getting to know some of the earnings announcements, from a company like this or it's just kind of interesting to follow some of those industry, trends that could be evolving.
Here But just it was funny because I looked up a report on just what a trillion. Dollars actually means just trying to wrap my head around what. A trillion, dollars actually is and one. Individual, put it this way if, you started counting, seconds, in reverse and you went back in time one, second, at a time and. You counted off a trillion, seconds, you'd, actually find yourself in, 30,000. BC, so. That's how much a trillion, is the. Weight of a trillion dollar bills would be equivalent to something like. 600,000. Automobiles. So anyhow. Trillion, dollars that's a lot India there's a major scope, a lot. In the financial, system when you're talking about this thing but. Blackrock, they, had some mixed headlines, stock, though it found its way moving higher today and a lot of that was probably because it wasn't, all negative there. Were some positives, that came out of Blackrock today. We. Already talked about United Healthcare another. One in the health services, product. Johnson, & Johnson, they. Did have a pretty big move higher they didn't follow through, Johnson. & Johnson though their earnings were received. Favorably. They actually had an earnings beat coming in at 212, and the estimate was 204. All right keep your eye on Johnson, & Johnson though because they, could possibly be at a level of potential. Resistance, they. Didn't really break anything, today but, that is like. One of those consolidation. Patterns here right, and if they are able to break through you, know some investors. That use that technical, analysis, if they're trying to forecast. Volatility. On the horizon, they, might take the width of that channel, from, about. 127. Up to about 133, and, so, that would be about five or six points and add. That to the top of the channel which, might send the stock back up into some. Previous resistance points, about. Six dollars above 133. Would take it out - what 139. Which, would be the point where they actually broke down a, couple, of months ago but it's kind of interesting to. See the way some of these stocks were following through today I just. One note we, do have a ton of earnings, coming up some. Big names in the next couple of days that will have earnings. NFLX. They're, gonna have their earnings report, that will be tomorrow after. The close and you, know of, course this is one of the most widely, traded stocks, that are out there you. Know streaming, services, and a, lot of comments about streaming, wars of course the stock has quietly, kind of been putting together a rally here, and it. Could be in a position where this, earnings means a lot in terms of where. The price of the stock could go in terms of recovery or heading back and testing maybe some of those previous lows, but, they will report earnings tomorrow after, the close a. Couple of other names to have on your radar. Unp, and this is going to be out of transportation. But Union Pacific, they're. Gonna report, earnings before. The market opens on the 17th. Let's, be aware there could be some volatility, driven, from that name and also. More, in the transportation. Complex, we got CSX. They. Will have an earnings report as, well their, earnings report is going to be tomorrow. After. The market closes by, the way if you wanted to keep your eye on any of these upcoming earnings, reports, and I told you I wanted to show you a neat, add-on. To the scan. That's. Available I you. Know on the tls scan I'm not gonna have time for that I just got a little bit too long-winded in other areas, but. Just, to, help you be aware on the calendar, page you, can be made aware of upcoming earnings announcements. Just by clicking on the calendar and, it's. Gonna basically show you if you just click on these days in the week what. Upcoming, earnings are going to be happening and if you wanted to narrow that list you, can actually. Have. The computer, only. Look it certain maybe indices, for example if you wanted to see what earnings are coming up on the, Nasdaq, you could filter this against the Nasdaq on the calendar, and see, what stocks will, have earnings that trade Nasdaq, okay but, I got a run.
Volatility. Has been interesting, this week it's generally, subsided, we'll have to keep our eye on some of those earnings. That are coming up and some, of these economic, announcements. To see if this momentum, is maintained, but, hopefully. That gives you some things to noodle on here, continue. To take a look at our webcast we'll have another webcast coming, up following this one so stick around and. Everybody. Hope you enjoyed the session and I, certainly hope you have a terrific, week, tomorrow I'll be talking about weeklies if you wanted to join that'll, be tomorrow morning, first, thing we'll, be talking about weeklies and short-term, option trading which earnings season is one. Of those that we like to explore. Different trade examples, so maybe we'll see you there alright remember what we talked about today is not a recommendation to buy or sell, and. Hopefully. Everybody has a terrific evening and we'll see you soon bye.
2019-10-20 18:29
