 Hey everyone Lilo here from smartoptionseller.com today is Saturday October 1st 2022. Yes, we finally made it to October That's a good thing and I'll tell you why in the video. So welcome back to another edition of the Saturday synopsis What do we do here on Saturdays? We look at charts. That's what we do been in this business for over 30 years now and and Chart reading technical analysis has been the way that I decide when to get in and get out of my trade So I'm here to make these free videos to help you up your Technical analysis game and how to start reading stock charts and for us here as option traders One of the most important things if not the most important thing is to learn how to read charts Why because if you're going to trade options, whether you're buying call options selling put options Selling call options doing covered calls spreads, whatever You have to know where the stock may or may not be going because you can't just trade options in a vacuum by themselves Because then options value is derived from something else and that's basically the stock price So, you know when you when you hear people touting or you see these websites showing you We can find the best option trades for you. All you have to do is look for high volatility Stocks and and here's the best spreads you you should do well You know, that's all well and good, but if you don't know where the stock is going Then all those option trades will fail So in addition to knowing how to trade options, you have to learn how to Look at a stock and and decide where it's going. Is it up down sideways? So if you get that under your tool in your tool belt as well, then your options trading success will go skyrocketing So i'm here to show you how to look at charts How to see what things are doing how you know, which way things are trending stocks are trending the indexes are trending And it'll help you understand whether it's time to get in or get out of a play So that's what i'm here to do on these Saturdays that look we look at charts We look at the indexes we look at some of the more popular stocks And I try to show you what i'm looking at and how how I set up my charts to help me decide when it's time to Get in and or out of an option trade. So here we go. Let's just jump right in As we typically do every Saturday Um, we always start with looking at the indexes and and to me the s and p 500 is is the best View over the of the overall market. So we look at the sp y which is the exchange traded fund for the s and p 500 So the sp y's chart will look exactly like the s and p 500's chart Okay, and you can look at the that you can look at the s and p 500 futures as well Those trade almost 24 hours a day the sp y trades during the regular market hours of the stock market Which is 9 30 a.m. Eastern till 4 p.m. Eastern. So we look at the sp y and we look at the triple q's the q q q and And the the diamonds the dia for the dow Jones and those all track the indexes So we look at the sp y and and if you've been with us for a while You know that we always start looking at the sp 500 but for those of you that are new what we do here is This is my chart setup. Okay, this is what I have I look at daily bar charts open high low close bars And I have three moving averages up here along the the price action I have a 20 day 50 day and 200 day simple moving averages. Here's the 200 day right here We've got the blue line here is the 20 day and this Line right here is the 50 day moving average down here I've got the 14 day rsi overbought oversold indicator and there's so many indicators You can put on charts some people think the more indicators that you put on charts The better chart reader you will be and and and I disagree with that because If you have a chart of so many indicators, it's just going to be a jumbled mess And you won't know what you're looking at So I try to keep it more simple 30 years in the business This is what I've decided to help me and along with that we look for support and resistance areas We look for these patterns and you know, I'll show you on the charts how I mark things up So anyway, um, so what are we seeing here? Basically, this is the chart of the s the sp 500 using the sp y going back about two years in time Okay, it all depends how you set up your charts You can look at six months two months five years doesn't matter, but I look at a daily chart I'm looking more long term. I'm not an intraday trader. I'm not a day trader. I don't try to trade off one minute charts This is not how I how I do it We look for longer term And so if you've been in the market or you've just been starting to trade You know since january 1st 2022, which is right here We've been in this downtrend the market's been in a downtrend Since since the beginning of 2022 and before that we we had been in a nice uptrend since the the the pandemic started in february March 2020, which is the big drop right here We've just been going up since since march 2020 the market's just been in this nice uptrend And you can see this blue little channel that i've drawn in here and a channel is a great way to see where A stock is trending. Okay, you can just see how the s and p 500 was in this nice uptrend And i've kept this channel on here for a long time just for for educational purposes So you can see the price action the price action is just all about which way the market is moving And then um, we had some sideways action still going upwards till january 2022 and we've been in this in this big downtrend And right here you can see this inverted v now We're going to talk about this because this was the last area of support just this week for the market So what I had here is as the market had been coming down since january We hit this low in the middle of june right here and we had this nice two-month uptrend till the middle of august and what stopped it right there is it came across the Downsloping 200 day moving average and the price action of the stock came right up to meet the top edge Of this uptrending channel. You can see the channel right here And it stopped right at the top it hit the Hit the resistance at the top of the channel and it hit resistance on the 200 day moving average this was also where um, we really started to see inflation really kicking Well inflation has been kicking in for a while, but the federal reserve in the us really started getting aggressive with raising interest rates And it just put us in this just back downtrending channel since the middle of august And the last line in the sand was this Support area which was the june low of about 362 dollars on the spy Okay, so I was hoping that we would find the support. It had been finding support this whole week Let's open this up a little bit. Here's the action this week So it was finding support right around 362, which was the low back in june and just yesterday friday September 30th We broke through the support and you can see the spy finished at 357 dollars So it broke through the line in the sand and for those of you who are fibonacci fans Fibonacci is just another indicator. You can use these are um retracement levels So if I if I pull up my fibonacci, um Tool here, let me move myself over here a little bit And pull up the fibonacci tool Where am I here? Okay, so the fibonacci retracement So you can take the low from june you line it up and you take the high in august and the retracement Is roughly let me just reset this here. The retracement is roughly Okay, move that there move that there was around 361 87 that was Basically the low here from june and the market just went through it yesterday September 30th now There's a couple things we can make note of this number one September has historically been the worst month seasonally for the stock market every september even august parts of august august september Have just been very bearish for the for the market in general seasonally over the decades Now now that we've entered october, you know, maybe this was the last exhaustion for the for the bears You know, it's yet to be seen next week. We'll see where the market goes But i'm hoping that and there's a couple other things that could jive with that This could be the last gasp for the bears The other thing i want to show you is a couple things and number two seasonally now that we're out of september You know, maybe people will start thinking out, you know, a lot of these stocks have been coming off We're hitting some value areas. It could be time to start buying also. The other thing i want to show you is What's the other thing the the fear and greed index and i bring this up and i show this to my newsletter readers sometimes The fear and greed index shows us, you know, what people are thinking out there How people are thinking and when we have extreme fear, which is what we're at right now 15 on the index it goes from zero to 100 When you get extreme fear everyone's leaning to one side everyone's leaning to the sell side everyone's selling everything Because they're very fearful the world's coming to an end. They're selling all their stocks And that's exactly when the market starts to turn around and go higher So not only do we have this extreme fear kicking in let's go back to the charts We also have the vix. Let me show you what the vix is We have the vix And here's the vix. Here's the daily chart of the vix. Now the vix is what's called the The fear and gade the fear indicator in the market. It's also a measurement of volatility in the s&p 500 front month options And the vix is here. Here's a symbol vix Now what the vix tells us is How people also are leaning in the market the vix moves inversely to the stock market So you can see the vix is moving up and we know the stock market prices are moving down So they move inverse to each other and when the vix gets really high it also means there's a lot of fear in the market And it also can determine turning points in the stock market So when the vix gets really high that's when the stock market starts to go back up again And the vix starts coming down. So you can see in the past This is about you know a couple years worth of time I've drawn this this resistance line up here where the vix will spike you get all these spikes in the vix That's when the market has big down moves And then and then the vix starts to come off and the market starts to go up So they move inversely with each other. So you can see here Since basically the middle of august when we hit that top in the market and the market started to fall The vix starts going up and so here, you know, we hit some top levels here So maybe not only are we hitting a top in the vix We got the fear and greed index and we also have that flush down on the spy chart of the sp500 chart And I'll bring that up again right here Maybe, uh, you know now that september's over This maybe could be the last gas for the bears and then we'll turn around and start to move higher towards that more bullish Fourth quarter last quarter of the year yet to be seen We also had the fibonacci had the full retracement of this move. So we've got a a bunch of things that Theoretically should call a bottom But you know, you there's no guarantees obviously in the market So you never know now if the market continues to fall Where's the next line of support potentially? Well in order to do that you have to look back in your charts So we're about 357 right here on the sp500 So you have to look you have your look back period Where was the last area of support for the market before it really went on this nice uptrend here? Well, the last line of support around 320 you can see right here this little w pattern, which is also You know a more of a bullish pattern you can kind of see what a w looks like here And the last support was right around 320 and then the market started to move up So if the market does start to come down over the next week or two Look for 320 as the potential support area And beyond that then then you know now we're just we're heading back down Every, you know every 10 20 dollars in the s and p 500 or the sp y And and the covet low was right around to just under 220 a share So we really don't want to get down that far. I mean i'm bullish for the long run I have my retirement money in the stock market. I want to see the market go up My portfolio has been going down to bleeding money just like everybody else's but i'm in for the long haul I know the market goes up over time. So i'm holding buying bits and pieces on the way down And you know, I bought some more just hoping that the The support would hold here, you know, not a lot just nibbling on the way down Getting you know lowering my dollar cost average here And i'm going to wait till next week see what happens. Maybe returning the calendar to october Is going to get this thing moving up, but there's no guarantees. All right, so that's where we are That's what's happening with the market this week went got through major support here at 362 And um, you know, we want to see the market go up The market is made up of businesses. It's not just numbers on a screen These are real companies that we're talking about here that make real products that that people buy and pay for So as long as these companies in the long rung are in the long run are profitable The stock price has to go up. Yeah, we're going to get pullbacks over time. It's just how the market works There's always ups and downs. This one's really long long on the tooth for sure Um, but we know what's happening out there inflation is still high. The the Fed is going to raise interest rates We know that's happening Companies will start to pivot they'll learn how to you know, reprice their products. They'll learn how to Continue to be profitable in the long run every company is going to have setbacks Over time But as long as a company can figure out how to deal with these these headwinds And and continue to produce profits the stock prices will go up, you know, and that's what's going to happen You know once inflation comes down once the feds, you know stops raising interest rates sometime next year probably in 2023 And then we'll see the market start to go up and earnest for now You know, we may start to churn around churn Sideways and then hopefully as you know, the end of the year comes in we'll start to move higher again So i'm going to take off the Fibonacci here But anyway, we've come through the the support here So we have to wait till next week to see what's been happening now for us in our in our services You know, we're we take more bullish trades. We sell put options. We sell put option credit spreads So we've been extremely light. We don't have any positions right now in in our spread newsletter In our put selling newsletter, we we have just very few positions on we still have cushion on those So even still we can you know, we can make We can take defensive measures which we've done we roll trades. So We're being very cautious. We've been cautious since the beginning of the year I think this so far this year We've taken the least amount of positions that we've ever taken only because the market is telling us It's not time to get into bullish positions in earnest The market is telling us it's going down. So why stick your your neck out there? Why put more money on the line when you know the market's just going down? You want to wait for the signals that the market's starting to go up now also what we do If you want to learn a little bit more about what we do, you know, we sell put options Like I said, we still put put option spreads and If you want to learn how to sell put options go to our website smart options sell.com click on the put selling basics This is our ebook free ebook Come here put your name and email address down here And we'll send you an email with a link to get the free book if you also want to know about what we do Here's our services tab right here. We have our newsletters And we have our coaching as well So if you if you're just learning about options, even if you want to learn about buying options or spreads or anything else How to check volatility what volatility is our coaching Sessions are a great thing. We have a lot of students that that really enjoy the coaching So if you want to learn a little bit more about that come to our website, all right, so let's move back to the market Let's check the cues Let's check the cues see what they're doing just like the s and p 500 These are the triple cues came down got the inverted v has fallen below the support line here Here was the june low head is also falling below. So same thing as the s and p 500 The market is on the defensive really on the defensive here It couldn't hold this level, but maybe this is the final washout. We'll see could have some more selling come in There's no guarantee. So play with caution. Let's look at the diamonds This is the dow Jones looking even worse than the s and p and the nasdaq Really sold off hard this week has really fallen below the june lows which was here And has gotten through that support. So the the dow jones Probably looking the weakest of the of the three indexes right now. All right, so we looked at the vixx We looked at indexes. Let's look at a couple individual stocks and see what's happening We look at apple we look at the more popular stocks. I can't go through all 3 000 stocks that trading You know in the stock market. So we look at more popular ones now now apple this week We'll have the the regular looking v had that nice bounce in middle of june when everything else was bouncing middle of august has come down to but this week Um, it it sold off pretty hard apple came out with some news that they're that they're they're telling suppliers this to um They're not going to make as many iphone's or some some sort of news item like that Which really accelerated this this down move the last three days of this week wednesday thursday friday So um, although it hasn't come back down to the june low. This was a pretty big move this week It was about 175 dollars a share in mid mid august And now it just ticked under one 140. So that's a pretty big move So we had the v had the inverted v now and hopefully we'll we'll see some support coming So apple on the defensive this week as well tesla. We always look at we look at tesla Had still been trading around this 300 mark for a long period of time had the congestion pattern here Here's a couple congestion patterns where the market will the stock will typically blow out One way or the other when it finally gets to the apex of the congestion pattern tesla's been holding up pretty well as far as a technology stock people love tesla their their permeables So so tesla's been holding up pretty well in the market. Um amazon amazon coming back down Let's open this up a little bit middle of august just like everything else started selling off Here's the low had some has support just above 100. So this is holding so far We're not there yet, but if the rest of the market comes down in the next week or two It's probably gonna come to support right here at this level. So keep an eye on amazon. This is amazon Um, let's look at some biggies. So there's a couple stocks. I wanted to highlight this week coca-cola Um, you know, it's a stalwart. It's it's just a great company for the long run Let's look at the interval here. Let's look at the the monthly chart for coca-cola In the long run, you know, coke's going up just all We're going back to you know, the 1980s here in the 70s even Over time it's been a great player dividend paying company strong stock And when you get waterfall moves like this, it's just you have to take notice Because there are times where you just need to stick your neck out and buy and is this one of the times where it's time to just You know plug your nose and and buy because you know in the long one Long run you will be rewarded. Okay apple. Uh, coke doesn't move this fast this far in that short of a time It's a slow mover. So this is a pretty big move. It's coming down to some some oversold levels on the r side We put in an unofficial trade one of the things I do in our newsletter as well As we put in some unofficial trades every once in a while For those who are looking to take have some more action It hasn't didn't meet all my requirements that I like to have met to get into a new trade But it's it's almost one of those things that you can't pass up So, you know, I issued a unofficial put sell trade on coca-cola. I can't give you all the details But you know keep an eye on this It's just one of those times where you know, maybe it's time to step up and buy Another one and utility stocks also during times of turmoil in the stock market utility companies usually hold up pretty well This is con Edison. Let me move myself here. Ed is the chart. I've been showing this the last few weeks Utilities typically go up. Um, let's look at the long-term chart Uh con Edison, you know, you can see bottom left to top right over the long run This is what you want in your long-term portfolio stock that moves up up up up up over time con Edison It's a one of the biggest utility companies in the northeast of the united states Look at this just waterfall getting down to oversold levels. You know, maybe it's a time to consider con ed As a potential long-term hold same thing with southern company southern is another utility companies so Um, also just look at that just look at the the the escalator the elevator down You know, the market takes the stairs up and the elevator down when it has down moves Getting sort of near the oversold levels. It was oversold back here in june Look at that nice pop it head. So maybe as it gets a little bit more oversold It'll pop up again as well. So this is this is southern company utilities hold up pretty well in times of turmoil What other stocks we want to look at nike nike had earnings that came out Towards the end of this week and just didn't do well. Here's the air pocket gap lower $83 a share, you know nike Everybody knows the company nike Can it be held down for for this long? Let's look at the monthly chart of nike Just you know, look at this if you're going to hold for the long run, you will be rewarded So how do you do that? Well, you have to find times when You think it's it's it's okay to step in and start buying now Nobody likes to buy when things are selling off like this, especially if you had nike in your portfolio This is not a fun thing But if you believe in the company, do you buy more or do you get out? That's up to you to decide But there are also times where you have to figure You know night when was the last time nike was at $83 a share and that was roughly um back in You know the summer of may of may of 2020 after the pandemic started. So right here Here's may of 2020 you can scroll down look down here at the bottom 2020 of may It was in the low 80s and it just went up from there So it will it finds the support here Getting near oversold. So, you know, something like that nike same thing Federal Express. This is FedEx FDX is a symbol Had a big air pocket You know, they had bad earnings Um, it's going down. So these are companies where you know, if you think these are solid companies for the long run Do you step up and buy that's up to you to decide, you know What we like to do when when companies like to have big down moves We like to sell put options at even lower levels of support You know, let's go back to nike for a second Um, you know, I this week towards the end of this week, I was looking at nike $50 strike put options 50 strike potential sell put options at the 50 strike. Where's 50 on the nike chart? Let's take a look Let's go back to the monthly. Where's the last time that nike was at $50 a share Back in, you know, 2016 2017 Five six years ago was a big area of support right here And it's also coming upon the up sloping 200 month moving average. Let's put a little let's put a little line here You know, here's a You know the support right near 50. We can keep this on the chart. We'll look at this for the next few weeks See what's happening But that's right around $50 here's 52 which coincides with the 200 month moving average So 50 is just below that you can see all this support right here around $50 a share So, you know for me is nike worth buying at $50 a share possibly So, um, you know, that's some of the things i'm looking at Let's take a look at some other stocks disney another company Shut down for a day or two because of the hurricanes in florida and I hope any any of you who are in florida I hope you all made it out okay and are doing well during this hurricane season On disney coming down to the last area support right around 90 which it hit back in july You know, disney is another one of those stalwart companies that you know in the long run is going to go up Let's look at the monthly chart of disney Over the long run goes up. Here's the pandemic right here And just shot back up. So it's coming back down to pandemic levels. $80 was the area You can see the 200 month moving average support right around 80 80 dollars for there as well Could it come down that far and bounce yet to be seen? But you know, it's an area that i'm keeping an eye on let's take a look at our list here and see what else we have walmart So we we draw the the channels. We draw the congestion patterns. We draw the uptrending channels So walmart was in the uptrending channel here. You can see the two lines And it's falling below it this week. Okay, just like everything else walmart's not immune But you know, it's a great company for the long run for the long run You hold on to walmart for years and years and years and you'll be rewarded Bottom left to top right you want to see stocks that have been moving up over time That that helps you decide, you know, which companies are worth potentially taking a stake in so that's walmart Let's go through our list here We looked at the vixx microsoft's getting hit this week back come back down in this channel Just like here you can see it popped above it But hit this resistance right at the 200 day moving average middle of august just like everything else And it's now come back down into the downtrending channel intel Chip stocks just it just keeps going down This is just not a fun chart to look at As well and it's but it's also getting down to some oversold levels You can see the 20 level those are my levels 20 getting oversold Does it mean a balance is going to be imminent? No, it just means that you know Maybe the selling is is getting overdone And maybe it'll find some support amd another chip stock. I love amd But it's caught up in that chip chip mess All these chip stocks going down amd really going down hard we had a Put spread on amd that we sold but as the market was telling us it's going down We got out and we're glad that we did because our loss would have been even bigger So we got out amd low 60s here breaking through all kinds of support Nvidia This is Nvidia Same thing moving down moving down chip stocks getting hurt pretty bad Micron same thing moving down, you know chip stocks are going to go up computers are here to stay But just they're just getting caught up with everything else. So everything's going down. So You know if you've been trying to you know buy bottoms here pick bottoms It's hard because the market's still telling you what's going down And you know keep some of your money On the sidelines until you get the cues from the market that it's going up. What cues will that be? We'll have to see upside action for a period of time We have to let the market, you know show it show us its hand first before we can feel confident about moving back in Um Let's go through the list a little bit more Let's see Cisco We also have a play on Cisco. We had a roll that but you know when you sell put options The end goal could be to potentially buy these stocks at really cheap prices and you can roll them out We've been rolling. That's what we're doing. So Cisco proctor and gamble great company, but but hitting some lows here coming down I'm trying to find some other stocks that that are going up Eli Lilly the healthcare companies Eli Lilly One of their drugs was just found to be really effective For something. I think was alzheimers. You can see the gap up hit all-time new highs just this week Let's look at the let's look at the monthly chart for for Eli Lilly and see what see what's been happening I mean, look at this thing just going ballistics health care Everyone's going to need health care drugs doctors, whatever. So the health care industry should be doing well. Let's take a look Um We've got Eli Lilly Bristol Myers. We had a play on Bristol Myers as well Pfizer Merck You know if you want to get all these in one shot. Here's the xlv the xlv is the exchange traded fund for all a lot of these health care farmer stocks, okay um We look at Verizon Verizon still going down Um, still haven't gotten in keep my eyes on it. AT&T same thing two biggest wireless carriers Here in the us PayPal kind of kind of scraping along doing okay um hanging in there. Let's look at um netflix as well Here we go netflix still holding on to that support right here Support in the you know around 225 dollars a share. So netflix, um, I you know the bottom may be here If it hadn't got if it didn't get sold off really hard this week when everything else was going down Uh netflix is holding up. Okay So, you know once the the general and everything else general market and everything else starts to go up Netflix will probably go up pretty hard. It's holding here. So that's a good sign for for anybody who got into netflix recently Uh, what else do we have cosco? Um, you know the big big companies big retailers like cosco hanging in there. Um What else pepsi McDonald's, you know McDonald's got hit pretty good this week. You can see the big move down Maybe coming to some areas of support. So you want to watch to see where the the prior support is And you know, here's the channel that I was in before the support right around probably high 220s You can see some more support here Right around this level here. So McDonald's may have a little bit more selling to do Um Warren Buffett we look we talk about Warren Buffett Here's the inverted v It popped through it just the other day, but came back up again. So we're still looking at around 263 264 support for Warren Buffett's Berkshire Hathaway and uh, I show this as well if you want to Take a look at another options trading strategy that I write about that I wrote about Um, here's here's the thing that I wrote