 What's up trade hackers welcome to today's update today's Monday, May 11th Starting with the trade hacker question of the day I keep getting a lot of this and the emails and some discussions in the community about How can this market possibly keep going higher with all the bad news that's going on? Well first off, let's go to the platform and take a look so S&Ps today down about nine down about 174 Nasdaq up 50 Russell down so kind of a mixed bag between the indices Taking a look at the S&P 500 first and so obviously this is the big down draft We saw and this has been the rebound thus far So the question is how is this? You know just massive rally continuing to happen. You can see at one point We were down 33% year-to-date now the S&Ps only down 10 if you look at the Nasdaq Nasdaq is actually positive. It's up 4% year-to-date and a couple things one Big tech is leading this market, right? I mean they are unequivocally absolutely leading this market you've got companies and I don't necessarily consider zoom big tech But you know zoom is up 142% you look at Netflix obviously Netflix still continuing to do well Netflix is up 33% year-to-date obviously staying at home doesn't affect them much I got things like Roku then you get you know what I really consider big tech more like Amazon Amazon's up 26% Year-to-date. I mean there they're benefiting from the Corona economy the stay-at-home economy that we're living in right now if you look at Facebook Obviously Facebook still continues to do well. It's up pretty flat for the year now Facebook is In a little bit of a different situation I mean they're getting a ton of traffic people at home people on social media So the amount of people that are interacting on Facebook But they're not as up as much as you might think because they are really ad revenue driven and a lot of companies have put A hold or reduce their ad spend on social media because I mean think about it If you're a pizza shop a local pizza shop and you had typically advertised on Facebook Well, you're not open right now So you're not advertising for people to come in but still just with the mass amount of people on social media Your Facebook's of the world and your Twitter's have done very well during this time Obviously what has not done well. Well, you look at like Boeing I mean, you know, it hasn't had near the rebound that we've seen and in a lot of the other things If you look at some of the other airlines like Delta DAL I mean, you know, you're not seeing near the bounce in Delta like you're seeing in everything else if you look at When casino surprisingly has bounced even more than than I was a suspect But but still not quite as much as some of these big tech. So big tech is leading the way Why else is this market holding up as well as it is? Well, think about everything that the Fed has done and everything that the government has done from a stimulus standpoint The Fed has cut rates to zero. They have just flushed this economy with cash You've got the PPP and the and the different forgivable loan programs that are going on where there's just so much cash being pumped into the system that it's certainly helped in propping this thing up and so that's what we're seeing so big tech and Stimulus that is what is keeping this market alive. So the question is How long can this last the PPP loans for payroll? I mean, I'm talking to people who you know when even when they're able to reopen like your retail your restaurant type situations You know, a lot of their employees are not even going to come back to work because they're making more money on Unemployment and these stimulus checks than they would if they go back to work And so that's going to be I can't remember exactly when that runs out or when those additional stimulus dollars Continue to come but that's kind of what you need to be looking for is when that stimulus money runs out Then what will these companies? What will these small family-owned companies as well as the large publicly traded companies? What is going to happen at that point? And I think that's going to be where the rubber really meets the road You know did to figure out, you know, is this thing is this stimulus money that they provided? Was it enough to really just let these companies not skip a beat and continue on as if as if this coronavirus never happened or? Is it going to run out and these companies are gonna be like oh now? What do we do so that's that's kind of the magic question that nobody knows But if you look at you know, we obviously this this initial run-up was really up until April Really over the last month. We've been trading pretty sideways And so it'd be interesting to see what happens when the stimulus money does run out But we're gonna continue to stay mechanical, you know, obviously we are we are short Throughout this and then and then at some point we kind of cut away a lot of our shorts and we kind of rode this up We were kind of neutral to long which benefited us and we've been adding short Delta as this has been going higher And now we've got some short Delta So we would benefit from this market going down so that's what we're at But we're not overly short, you know, we're we're still gonna stay mechanical a lot of a lot of neutral trades Some short Delta trades overall. We are definitely short So would benefit from a downside move but definitely not betting the farm that this this thing is gonna crash again If you know if you want my thoughts kind of what I think is going to happen, you know I still think this thing's gonna roll over. I still think we're gonna go below The lows that we saw in March. I hate to be I'm not an eternal pessimist. I'm a pretty optimistic guy But overall that is my opinion of what I see happening So what else is going on, you know, what happened in the markets today looking at some of these individual stocks You got some again big tech is up AMD up big Apple up big the banks got hammered to the downside You know Bank of America down over 4% city down over 4% So it's kind of a mixed bag financials if we look at just XLF Which is the ETF the tracks the financials the financials are down big and they're down They're still down 30% year-to-date XLF is so the financials have certainly not seen the bounce that that tech has seen in some of The other industries So like I said, this thing is being really held up by tech if we see financials start to roll over and Obviously, especially if we see some tech start to really roll over That's when we're gonna say look out below But for now, we're just we're continuing to trade in a pretty narrow range over the last month And and then if you look at some other stocks like I mean look at Wayfair Wayfair is your online Office furniture a lot of even in home decor furniture type place. I mean look at this thing back in March I mean this thing they were very close to filing for bankruptcy. It got down to $21 a share and now it's at $192 a share. I mean if you're looking for a contrarian move something to short, you know Maybe maybe this is your play. I haven't dipped in yet But definitely tempting the way that this thing has moved on the back of basically getting ready to file for bankruptcy Just a month and a half ago Some of the traveling company, you know booking like I said Delta, you know, those are continuing to see some downside pressure So we will see what happens. So what did we do today? We added an iron duck in SPY Look at SPY with our iron duck strategy We have a big buffer to the downside so we can profit as long as this thing kind of doesn't go down too far And then obviously if it continues to rip higher We have no risks to the upside and we'll continue to make money no matter how high it goes So I really like a lot of those plays where you have, you know No risk in one direction as well as some plot volatility still high if you look at the IV percent on SPY It's still at 79, you know IV rank down at 25 level, but these options are still elevated There is still a lot of uncertainty out there Which causes the price of options to be elevated and still a good time to be selling some premium So that's what we're gonna continue to do. Hope everybody has a good evening. Talk to you tomorrow