 Hi everyone, Lilo here from smartoptionsella.com. Hope everyone is doing well. Today is Saturday, December 24th, 2022 Christmas Eve. And I wanna wish all of those of you who do celebrate very Merry Christmas. And so what are we doing today? Well, welcome back to our weekly Saturday synopsis videos. What are we doing these videos? Well, just like the title of the video says, we're gonna see what the market's going to do. We're going to figure out where the market's headed, where stocks are headed, what's going on in the market. That's what we do most Saturdays, trying to figure out where stocks are, where stocks are gonna move. And for us as option traders, and maybe you as an option trader as well, that is the most important thing, getting the direction of the stock right. Because you can't trade options and be profitable with options without knowing where the stock may be headed to. That's the only way to do it. You can't just trade options independently, just thinking I'm just gonna trade options. Well, the options value is derived from something else. And most of an options value is derived from where the stock moves, up or down. So you have to be aware of what's happening in the stock market. So that's what we're here. That's what I do most Saturdays, try to help you figure out where the stock market's going, where stocks are going, and try to help you up your options trading game or even your stock trading game. I'm a technical analyst. Been doing this for over 30 years now. I watch the charts. That's what I do to figure out when it's time to get in and out of trade. And the charts tell me when that is. So let's just jump right in as we always do almost every Saturday and look at some charts and figure out what's going on. So we always start with the SPY. And before I do that, let me move myself over here a little bit because not every chart that we look at has the symbol. And people tell me, Lee, can you please move your webcam screen so we can see the symbol? So up here in the top left is always where the symbol of the stock is going to be. So you can just look up there. If I don't have it written on the chart here, it will be up here where you can see. So what do we do here? We always look at the SPY first, which is the exchange traded fund for the S&P 500. We look at the S&P 500 as the best overall gauge of the market. And that helps me and maybe you as well see where, what's the general trend of the market? The market has trends and we always want to find the right trend and then plan our trade. So we look at the market as a whole and then we go from there. So up here on this part of the screen is the actual chart action, the price action for those of you who are new have never watched one of these Saturday synopsis videos. Up here is about two years worth of data on the screen. Each line is one day's worth of trading. So this is a daily bar chart, open, high, low, close bar chart of the SPY. These are not candlestick charts. And I try to keep the chart simple as far as technical indicators. There are hundreds of technical indicators you can look at. I only use four of them on my chart, three of which are moving averages. I have a 20-day moving average, blue line here. I have a 50-day moving average right here and I have the Mac Daddy 200-day moving average. When you're looking at a daily chart they're daily moving averages. If you look at a weekly chart they are weekly moving averages. So they're all simple moving averages, not exponential. So those are the three indicators I use up here and then down here is my fourth indicator which is the RSI indicator right here. RSI 14-day look back period based on closing prices of the day. That's what the C stands for, closing prices. And it's an oscillator and it oscillates between overbought and oversold levels. And here is these horizontal lines. This is at the 80 level and this line's at the 20 level. You can configure those however you want in whatever your trading platform has. And so it oscillates between overbought and oversold. And when it gets overbought it could mean that the stock price action it could be ready to roll over. And when it gets oversold it could mean the price action is ready to turn higher. So I use the RSI along with the three moving averages to try to help me gauge which way the stock may be headed next, okay? Nothing's guaranteed. There's no guarantees in trading. It doesn't work 100% of the time. Your timing might be off but it's just these things these items I've over the years figured out these are the only items I need on my chart to help me to figure out where the market's going next, okay? And in addition to that we draw these, you can see it's a channel. You see the price action within the blue lines, okay? We've got this big channel here and these smaller channels here. These are hand drawn. They don't just appear on the charts like the moving averages do. So there's lots of patterns that will show up time and time again and as we look at more charts I'll show you some of these patterns. But if you've been following me for a while we know last year, the year in 2022 right on January 1st the market went into a bear mode and we've been in this downtrend all year long. You can see the top edge of the channel the bottom of the edge of the channel that is what I've drawn. And the market has been in that downtrending you can see it's going down with fits and starts it goes up, it goes down but overall within this downtrending pattern. So we all know if you've been in the market if you have long-term holds, holdings I should say you know the market's gone down because you see your portfolio values going down if you have bullish positions. I have bullish positions. I have a long-term portfolio. I have retirement accounts. I want the market to go up but the market has been stubborn this year and there's a lot of reasons why. If you've been following the market you know the reasons are we have COVID still out there we had these supply chain issues you had the war in Ukraine that's still going on rising interest rates, rising inflation all these things have just been hanging over the market all of 2022 and just kind of pushing it in the overall downwards. Yes we have these pullbacks higher and then it gets sold off again pullback higher it gets sold off again still in captured in this downtrending pattern. So the market has not been great for bulls this year and us as we do we run two newsletters as well both bullishly oriented newsletters and we've been a lot lighter this year throughout the whole year and taking new positions. This is we've had the smallest amount of open positions this year due to the market going down because the market is telling us it's not the greatest time to be in bullish trades so we've been playing a lot lighter that's just how it is let the market tell you where it wants to go. We are put option sellers and put option call put option I'm sorry put option credit spreads and those are more bullishly to directional types of trades selling naked puts and selling put option credit spreads. Okay that's what we do and if you want some more information on that you go to our website smartoptionsseller.com you can see right here along the long the heading here put selling basics that is our book that is our free ebook that we wrote that I wrote I should say about selling put options why it's so great why we do it and why I love put selling so much put in your name and email address here we'll send you an email with a link to the free copy it's free it's all about put selling and that's all that we do here if you want more information about our services our two newsletters naked put selling and put selling credit spreads and our one-on-one coaching we have we have students who come along we get them up to speed make them better traders okay so that's what we do here so once again where is the market headed where are stocks going you know there's no way to spin it the market's in a downtrend and right here you can see this past week past two weeks we came along the top edge of the channel market was going up hit the resistance and then it's come back down within the middle of the channel the path of least resistance has been down and unfortunately I thought right here when the market SPY hit 410 got above the channel this day right here I thought we were gonna keep going but it ran into some resistance at the top edge of the channel Jerome Powell who's the chairman of the Federal Reserve here in the U.S. gave his speech about the future interest rate hikes he said they're gonna keep the pedal to the metal a little bit and you know they're gonna stay aggressively wanna get inflation down so the market was looking for a little softer tone in his speech and it wasn't what the market liked so from here the market's just been going down the last two weeks it's unfortunate but we're right back down in this channel now so the path of least resistance is obviously down where and if is the market going to catch a bid or find some support well we have our line drawn here at 360 this is the next line of support just above 360 we had for 390 as the last line in the sand and I'm gonna draw this line a little bit more here bring it out so here's 390 okay and we had that as our line in the sand before because as you look back 390 was an area of a lot of price action in the past here's a lot of price action here's a lot of price action here's some and here as well so 390 was basically a pivot point between being support it was support here and then it became resistance here and then support here again it got through it and resistance here and it got through it and then as it was coming down support but it fell right through it so right now it's trading around 382 and it looks like this 380 level you can see it's kind of bunching up right around 380 that's the next area of congestion where will it go from there like I said the next area is around a little above 360 but we have this one day right here this was 348 is where if the market's going to keep going down it's gonna gun for this level right here 348 I don't wanna see it go that low but a lot of people are talking about hey you know 2023 is gonna be a recession year it's gonna be bad for the market bad for the economy we don't know yet but a lot of people are talking and we're gonna see new lows you know will that happen we don't know but that's the path of least resistance now is lower it's falling below here's the 50 day moving average markets falling below that it's below the 20 day below the 200 day so the market price action is below all three moving averages and just well within this channel again so right smack in the middle of the downtrending channel and until it can until it can break out convincingly out and above this big channel here it's gotta get up here gotta get up here like 420 and then keep going maybe in 2023 we'll see it but for now it's gonna be down in the channel and what we can do is we can even redraw or keep drawing this lower edge here get some lines here so you know we can keep going down a little bit here to see where you know the price action the price action could fall all the way down to the bottom edge here and then bounce it's all up in the air so this again this is another reason why we've been staying more on the sidelines as far as our trades the market's telling us it wants to go down so putting your money on the line for bullish trades isn't the greatest thing right now as far as trading goes now for you long-term traders like myself I will nibble on the way down buy a little bit more for you know my long-term portfolio I like to buy the SPY because I get a good smattering of lots of different stocks so as it's coming down you know if it's gonna either come to a support area or down here to the bottom of the channel those are some areas where I look at to nibble on some shares not going full force just buying a few shares here and there to kind of catch a bottom and if it keeps going down well then I'll look for the next area support beyond that and maybe buy a little bit more and if it blasts out to the upside then we're starting to make some money but for now the market's still telling us you know what we're not ready to be full bulls yet so we're staying in this downtrend hopefully 2023 will be better don't know yet let's look at the NASDAQ we use the triple Q's for that open it up a little bit more here so the NASDAQ 260 is that next line in the sand right here you can see our support line it's got very close to that this week will it drop below it it's potential the path of least resistance is down get to that 260 we'll see beyond that you have to look back in the past to see where the next area of support could be this is a weekly chart now so like I said here's the 260 level going back here and beyond that you know it's got below the 200 week moving average falling below that you know there's really no no new support area you can see this area shot up nicely from the 200 week moving average but areas of support and resistance are where a lot of action price action had been in the past you know if it drops here you know where is the next support the next real support will probably be right here which is roughly $160 a share right here so if the market drops it can drop another $100 on the triple Q's if it gets really bad so this would be the next real major area of support it's tough to see that let's go back to the SPY real quick for the weekly so the next area of real support would be on the 200 week moving average right here and that's roughly around $365 still not here's the low $348 so it would be $365 and then the next line in the sand would be $348 which is roughly where the market started to take off when it was going upwards see this nice uptrending channel and that started right around $348 so let's draw that on the weekly you can see so you can see where that support really was so you use these levels a lot of people look at the same things so these numbers tend to be self-fulfilling prophecies where people will get in and out at certain pivot points or certain areas of support and resistance so this $348 level if you look back was that pivot point where the market really started to drive higher so if we come back down here maybe it'll bounce and start to go back up you can see on the weekly chart the bottom edge of the channel here's the channel is right here's the line the bottom edge connects right here at that $348 level so maybe if the S&P 500 goes down it'll bounce at that $348 level getting back to the triple cues here's the weekly again it's sitting right near that support right around $260 and like I said if it goes down it's got a long way to drop down here but hopefully that's a long way we don't want to see that let's look at the Dow Dow Jones with the DIA the DIA here it is up here is the symbol this is the exchange traded fund for the Dow now the Dow has been the strongest of the three main indexes the Dow, S&P 500 and NASDAQ you can see it's had this nice bounce here had the double bottom and the resistance was up here so this is the weekly let's go to the daily chart okay so here's the daily chart had that nice bounce we drew this double bottom line a while back it bounced perfectly and look the strong move higher found this resistance near the top that last top in mid-August it got knocked back down but it's sitting right on the 50-day moving average right here you can see it's sitting right on it so maybe the Dow will be strong next week maybe it'll help hold up the rest of the market so alright that's a look at the main indexes let's start to look at some individual stocks we tend to look at more popular individual stocks don't go through all of them but we always start with Apple most of the time and Apple's been a real party pooper of late we have a put option credit spread on Apple and it's just it keeps going down last week it fell through the 135 level I had drawn this line last week 135 was a line in the sand and it dropped through it this week now it's trading hovering right around 130 is that next level let's draw another line here right at 130 let's get that in here 130 level next line in the sand for Apple it's really the next line in the sand because here was that last swing low just below 130 there you can see if we go back even further the next line in the sand support area is right at this 122-123 level so if it drops through the 130 level it's gonna gun for 122-123 which was this last swing low area here we need Apple to catch a bid here to start going higher because a lot of these stocks have an outsized effect on the index okay each stock doesn't doesn't have the same proportion certain stocks like Apple has a bigger effect on the overall market so whichever way Apple moves the indexes will move proportionately big as well so we need stocks like Apple and Google and Amazon these Fang stocks to really move higher if we want the market to go up and Apple's just sitting on the support here has fallen, you know, $20 a share in a very short period of time we need a balance here we need some kind of catalyst for the market to go back up Apple has not been has not been good to the market I'd say that in order to our position as well so Apple look for hopefully maybe this 130 level line in the sand maybe hold up next week let's look at Tesla a lot of people email me to keep looking at Tesla to keep showing the charts Tesla is just in this horrible horrible downward movement and a lot of it is because of Elon himself okay, you know, he's taken over Twitter it's not looking good at Twitter he's fired, you know probably more than half the company I don't know how they can survive he's selling his own shares of Tesla to, you know, keep things afloat but I think the other reason why Tesla's been going down so much also I just read this is that they're starting to give some rebates you know, some cash back on Tesla cars people buy cars they're giving you some money off which they typically don't do at Tesla so I think people are thinking well, if Tesla's giving rebates that means things aren't going so well at the company they're not selling as many cars or they have to offer discounts to sell more cars so people are also using that information to sell more shares of Tesla Tesla's closed at 123 I mean, this is a low we haven't seen since let's go to the weekly chart here come on, let's look at the weekly I mean, it just blasted through the 200 week moving average here was that last congestion pattern we talk about the congestion pattern which is a little triangle where the price action gets real tight and then it explodes one way or the other so we can see it's sort of getting back into that this last congestion range, $123 which was right around here right around here, roughly so I mean, if it's gonna fall down through here who knows where the next leg is the bottom, the next swing low might be this thing could keep going it's kind of scary because the breakout was right around $137 or so when it broke out of this congestion pattern and went higher and we're below that we're at $123 now so we're kind of below this price action here I really can't make a prediction or a call on Tesla here I mean, it just looks weak but the only thing I can say is that on the RSI it's getting very, very oversold on the RSI it's below 20 it's at 1981 below my threshold which is the 20 threshold for being oversold so maybe we'll get a bounce maybe Tesla will catch a bounce here but will it be the bounce that takes it all the way back higher hard to say it could just be a short-term bounce because it's oversold and when it bounces then people will start to sell it off again that could happen as well but Tesla, not looking so great right here it fell through this long line in the sand we had which was a little over $200 here and just blasted through that so I think the only thing Tesla has going for it right now is this oversold condition that could give it a bounce but it might not last long it may continue to sell off after that so keep an eye on Tesla if you have shares here let's look at Amazon so like I said the tech stocks, the Fang stocks really been taking it taking a beating this whole year 2022 has been a really bad year for tech stocks Amazon, here's the symbol up here AMZ and Amazon I think we all know the symbol for Amazon it's just sitting on the support at $85 I mean it's just hanging in there okay let's go back let's look at the weekly chart and see where the next support is so we drew the long support right around $85 I mean it's falling well below the 200 day moving average support after that is probably this swing low right here which is the low was maybe $65 a share this bar right here so if it falls through $85 it's got roughly $65 as the next level of support so keep an eye on Amazon I mean these stocks are going down tech stocks going down Google we can look at as well Google falling through the line that we had drawn the support error falling through that where's the next error support gotta go back to the weekly again when you start having to look at the weekly to see where the next support area is you know stocks have been in a downtrend because you gotta go back further in time to see where the next support may be here's the 200 week moving average falling below that where is the next support area for Amazon it's hard to say I mean here's a congestion area right here so it's kind of hovering around that next area probably be in here you know low 70s low 70s and then the ultimate would be right around $50 which was this last swing low here that had bounced off the 200 week moving average so it's hovering just below 90 next area support 70 probably and then down to 50 I'm hoping that we're not gonna see these levels in 2023 but you know you need to be aware of them you need to know where these where these support areas lie okay let's look at some other charts here we can go through the list Microsoft in this downtrending channel this is the week let's look at the daily here's the daily still encapsulated in a downtrending channel had this little up channel here you know the last couple months or so last month or so and then it dropped back down again outside of it so the last two weeks since Jerome Powell had that that speech I think was on December 13th yeah things started to come off again so that's Microsoft Intel you know the chip stocks going down again Intel AMD we always look at AMD still going down you know had the little up move here we had a put sell on AMD and naked put sell that we were able to get out of we made a profit on it even though the stocks going down that's one of the great things about selling put options or being an option seller is that you don't always have to be right about the direction of the stock and you can still win that's why we love selling put so much you know do yourself a favor go to our website and sign up for the free put selling basics ebook it'll give you insight into a great trading strategy if you don't do it already so AMD going down micron still now back in another downtrend Nvidia you know up here you can see that you can see the symbol Nvidia just just like the general market in the downtrend had this nice uptrend right here had this nice up channel look like it was getting ready to go and then Jerome Powell just crushed it you know got has fallen back down through the uptrend trending channel here so the chip stocks having it rough as well let's up here move the menu bar up here all right what else we got Nike had a good week actually Nike had earnings came out just blew things away and it rallied you know almost $20 a share so Nike was down in this little channel trading right around 102 and then boom got up to about almost 120 this past week so if you have shares of Nike things were looking good we've been talking about Nike it's in this nice little up channel here we can draw that just you know you connect some bottoms you connect some tops just you know just to give you a visual of where the price action is oops we don't want to do that so Nike buck the trend had a good week what else what else we have Netflix we talk about Netflix we had a position on Netflix to we we sold a put spread on that we took profits on Netflix as it was going up so as it was going up put option prices come down that works out for us because as an option seller you sell it at a high price and then you try to buy it back at a cheaper price that's what we were able to do with Netflix was in this channel starting to fall out of it but Netflix is still looking pretty strong here you know it has a lot of price action to make up had these gaps here gap here but it has almost it just about fill this so it did fill the gap here you know Netflix was open here had earnings and opened here the next day so have this big gap to fill as the subsequent price action comes up and fills the gap meaning this new price action touches the last high here before the drop so we fill the gap so Netflix the next plan is to fill this gap all the way up here which is close to $500 a share so it's got a long way to go to fill this next gap but it's certainly moving in the right direction for Netflix Cisco, trying to find some stocks that are worth really looking at Procter and Gamble, PG look at this nice move higher it has sort of bucked the trend as well you know Procter and Gamble is a company where they sell things that we use in our everyday lives so people keep buying these things so Procter and Gamble going up Walmart is another stock we look at it's a great place to get your household items cheaper and even your food cheaper a big part of Walmart's profits are made up of the food that they sell and so you can see they've been going up you know we got ups and downs but in overall you can see Walmart's been in this uptrend which is good Target, not as strong as Walmart had this huge huge gap down back in May and then it's just been kind of hovering in this sideways action but getting down to the 140s so that's hanging around the lows there so Target not as strong as Walmart Disney, we talk about Disney too getting down to the COVID lows let's go back to the weekly chart for Disney here was the COVID lows right in early part of 2020 we could you know if you're waiting to get long shares of Disney as I've been talking in the past 80 might be an area to nibble on let's look at the monthly let's go to the monthly for a second here move myself just for a second, monthly okay so you can see the support right around the 80 level going back to 2014 early 2014 80 has held up and it's got the 200 month moving average as a you know a confluence here supported 80 200 month moving average right at $80 so if Disney comes down to 80 that could be you know if you're gonna nibble on buying some shares of Disney $80 could be your point it's right around 88 now so it's another $8 lower it has to drop in order to you know catch it on 80 will it hold at $80 we don't know but there's a good chance it will based on past support levels so Disney may be gunning for that 80 level what else look to Tesla so our healthcare stocks Eli Lilly just going up Bristol Myers kind of hanging around but you know had that nice uptrend sideways action for now Pfizer has a nice little uptrend here Merck Merck doing well making all time new highs Johnson and Johnson in an uptrend so we like the pharma stocks because people are going to need healthcare and they're gonna need the medicine and the drugs that these companies offer I always talk about the XLV if you want to get all these pharma and healthcare stocks in one shot the XLV is a is the healthcare ETF you can see right up here healthcare select spider ETF okay strong we've sold put spreads on the XLF as well the XLV as well okay PayPal still hanging around the lows square hanging around the lows you know what's the point of doing all this look looking at these charts why are we doing this people ask me why are you looking at the charts so much because the charts tell you where the where the next move may be and in order to trade options I need to know where the stock is and I need to know what the stock chart looks like and whether it's worth taking a trade okay otherwise I'm not there's nothing for me to do so I look at the charts and then I to figure out whether it's time to get into an options trade Costco we had drawn this congestion pattern on Costco and you can see it's starting to break down to the downside as the price action gets tighter and tighter within the triangle it's going to break out one side of the other it looks like it figured out where I wanted to go to the downside so broke out to the downside of the channel McDonald's still hanging in there you know McDonald's is not is not doing bad at all keep an eye on McDonald's Pepsi we look at these we look at these great dividend paying companies look at the nice trajectory of Pepsi just bottom left to top right that's what you want to see out of a chart just go higher over the long run sure it's got some pullbacks but within those pullbacks it's still moving higher love Pepsi as a great dividend paying company 3M not much there okay so Home Depot and Lowe's we have a position on Lowe's we're going to look at Lowe's L-O-W here's December L symbol L-O-W we saw the put spread on Lowe's because we thought with the price action here was telling us it looks like it was going to go higher and actuality it's gone lower but that's because of Jerome Powell but the great thing about our spread is that we have a lot of downside cushion to help us out meaning we had the stock has to really fall far really, really fall far for us to get in trouble with our trade now we're under a little water on the trade but not nearly as much underwater as people who have bought the stock and bought call options and taken outright bullish trades those are all not doing great but when you sell puts when you sell naked puts and sell put spreads you can get a lot of downside cushion which is what we've done so our trades hanging in there even though the stock's going down that's Lowe's here's Warren Buffett's Berkshire Hathaway fund you know he's kind of hanging around had a little pullback here but this fund is made up of Warren Buffett's stock picks and companies that he owns you know if you want to follow Warren Buffett you know you can buy all the shares of stocks that he's that he owns or you can just buy the his fund at three hundred and six dollars a share or if you go to our website and you get the services tab here you go to shop here's a different options trading strategy that I wrote about how to follow along with Warren Buffett's trades and this options strategy will allow you to get into all of his trades for just pennies on the dollar so if you're interested in taking a look at this you click on here and here's the the report that I wrote it's an e-book that I wrote about following Warren Buffett piggybacking Warren Buffett you know he's got to deal with the downturns as well but over the long run let's look at the monthly chart for Warren Buffett's fund look how beautiful that is up up up up up okay what else what other stocks do we have before we call call it a day here Facebook Metta hanging around loads IBM doing okay had a little pullback here but you can see it bounce right at the fifty day moving average here IBM what else we have uh... chewy I haven't talked about chewy that much uh... not really doing much sideways action Clorox wanted to mention Clorox had the flat top going as the uptrend and then it had the flat top which is the resistance try to get through one fifty couldn't Warren Buffett I mean uh... drone Powell spoiled that party but you can see that it's hanging around the fifty day moving average and you got the two hundred day kind of giving it support as well so maybe Clorox will find a bid here and go back up one fifty is the level for for Clorox needs to convincingly get above that to see it continue to move higher we'll look at Colgate Colgate still in this nice uptrend you can draw these channels tell you which way the price action is going and you can see you know when it pulls back when it pulls back to the bottom edge of the channel that could be your area to get long if you're looking to get long all right uh... we're getting to the end here oh coca-cola as well still doing nicely has a nice uptrend great dividend paying company uh... conhead and southern company two utility companies that I talk about doing well also we had a naked put that we sold on southern took profits this past week as the market goes up works out for us that's called that's called their will summarize with the s p y again pathways resistance is just lower unfortunately for the index itself hovering around the three eighty level you know next week is a short week uh... markets close on monday december twenty six not gonna have a lot of action next week it'll probably hang around three eighty level you know we're taking we're taking some time off next week uh... hopefully i'll make a video next saturday for new year's eve don't expect too much to happen in the market this week probably trade around three eighty level on the s p y all right let's call it there uh... hope this video has been helpful i hope this is this is good for you to to learn how to look at stocks because if you want to trade options or you want to trade stocks you gotta know which way the stocks are moving and you and you got to draw some lines and figure out you know where the support resistance lies to give you a better chance to be profitable with these trades all right so if you like the video please give me a thumbs up leave me a comment below tell your friends send me an email i'll always answer and uh... i'm wishing all those who of you who celebrate christmas have a great christmas merry christmas and i'll try to be back here next saturday for new year's eve alright everyone have a great weekend got some nfl games on today uh... and i'll see y'all next week this is lee lowell signing off