 Hi everybody, Lee Lowell here, smartoptionseller.com. Today is Saturday, October 9, 2021. Hope everyone is doing well. Welcome to another edition of our Saturday synopsis. What we like to do here in these videos is take a look at the charts, we look at the indexes, we look at individual stocks, and I try to show you what I'm seeing out there, where a stock has been, where a stock may be headed in the future. I'm here to try to help you become a smarter and more profitable stock and options trader. We concentrate on trading options in our service, in our website, but we always have to know about the stocks first. That's the most important thing. Having an idea of where a stock may be headed is the best way to engage in an option trade. You can't trade options unless you know where the, what the stock is going to do or not do. All right, so it's very important to understand what stocks are doing. The way that I understand that and the way that I create my trades is by looking at stock charts. That's how I, that's how I figure out what's going on in the market. It's called technical analysis, stock watching, chart reading, whatever you want to call it, technical analysis, that's one way of figuring out where a stock is going, another way is fundamental analysis. That's more about looking at the internals of the company, how are their sales, how are their earnings, what's their dividend payout, like all that kind of good stuff, the underlying details. I like to look at the charts because I like to see where the stock is moving, where a stock's trending. And I'm in the belief that every part of information about a company, even the fundamental analysis parts of the company is all reflected in the charts, okay? So that's all I need pretty much. And so what I want to do is try to help you read charts as well. So we do these Saturday synopsis videos to try to help you figure out different ways to look at a chart, look at patterns, look at technical indicators, moving averages, all that good stuff. So what we like to do here is we look at the indexes first, the S&P 500, the NASDAQ and the Dow, and then we dial it down to individual stocks. So let's just jump right in here. And we always take a look at the S&P 500 first as represented by the SPY, which is the exchange, traded fund, the trades like a stock, gives a good overview of the broad market in general. Now for those of you just tuning in, this is what I use to look at charts. This is my eSignal platform. You can look at charts on many different platforms and some of them are free out there. This one I use called eSignal. I believe it's a pretty good platform and using it for over 20 years now. And on my charts, I usually look at a daily bar chart. Each one of these black vertical lines is one day's worth of trading. I can open it up a little bit more, make it easier to see. And on my real estate here, my screen dials it back to about two years in time of daily chart, of daily trading activity. If you're a hyperactive trader, you can look at one minute charts. And when the screen pulls up here, each one of these bars now is one minute's worth of trading. So a one minute chart is going to look a lot different than a daily chart. We get a lot more history. We wanna see where a stock is trending. Which way it's moving? Is it moving up? Is it moving down? Momentum is a big deal in the market. Because everyone's playing the same stock. Everyone's looking at the same chart formations. So everyone pretty much sees the same thing. And if they're knowledgeable enough, they look at the same indicators, see which way a stock's trending. So momentum is very big in the stock market. And a stock will trend in one direction until something comes along and moves it in another direction. That's typically either a bad earnings announcement, which comes every three months or some other news item within the company or just general market news. Geopolitical news can always move markets. But in the end, it's how well that company is performing is what's going to determine its price trend. If the company is creating good products, people keep buying those products, the company's sales and earnings keep going up over time. A stock will tend to move up in price over time. And on a chart, that's moving from bottom left to top right. That means the stock is moving up. So let's take a look at the general broad market. Now typically individual stocks, if there's nothing really going on with that company, they'll tend to follow which way the indexes go, okay? And if the indexes are moving up, typically a stock will move up as well, even though there's no major news going on with that company. So we like to really focus on the indexes here. Now what you'll see on the chart is, I've got certain things marked up. I've got channels here, W patterns. Down here is the RSI indicator. People ask me, Lee, what do you usually put on your charts? What are the indicators that you use? So I'll go over that briefly, do that each week. I know we have new people watching every week. On the chart, this is a daily open high low bar chart. Some people use candlestick charts. I don't use candlestick charts. I just use the open high low close bar. So each vertical line has a little dash mark on the left. This is where the stock open for the day. The high and low obviously is the top of the bar and the low of the bar is the low of the day. The bottom of the bar is the low of the day. And on the right side of each bar, there's a little dash mark. You can see this one right here. That's where the stock closed for the day. The closing price is very important, okay? And then so I have three moving averages on each chart. I have a blue, simple 20 day moving average. And then I have this red, simple 50 day. And then the green is the simple 200 day moving average, okay? So what I like to do is, first of all, you like to see the general direction of the stock or index obviously moving up since the pandemic last year, March 2020. Stock markets just had been steadily moving higher. Now, what we try to do is in our service, in our newsletter, we're looking for bullish patterns. We want stocks to go up. So we're always trying to time our entry to a good spot. And how do you do that? Well, if a stock's in an uptrend, you wanna try to time your entry when it's on a pullback, okay? Even if you're gonna be holding a stock for a very long time and talking years and years, you know, where you get in really doesn't matter so much in the short run because eventually hopefully the stock will go up over time. But if you're on a shorter timeframe, your timing is a little bit more important. So when you're trying to time an entry, especially a bullish entry, you wanna try to enter on a pullback. Well, how do you know if a stock's on a pullback or how do you know if a stock is entering a new full-on bear move? Well, in the end, you don't, you don't. But you have to go with history. You have to see what a stock's been doing in the past and hopefully that history will keep going. Now, if there's no major news on a company, you know, their earnings aren't coming out for a few months and there's nothing else happening in the background, the stock will typically keep going in that same direction. And when you wanna time it, the way that we do it, we look for pullbacks to either the 20-day or 50-day moving average. Now, you can see on the S&P 500, every time you either pullback to the 20-day or 50-day moving average, it will bounce. Okay, so if you're looking to time your trade, you wanna look for a bounce or a pullback to the 50-day or 20-day moving average. Typically, most of the time, it won't pullback to the 200-day moving average. That would be a pretty good sell-off. So if you're going with what's been happening, if you're trying to time a trade, you can look for a pullback here, you can look for a pullback here. And so every time it goes up and pulls back. So what I try to do is I try to get a gauge for where stock's going and where it might move to next. Now, we had a situation where the general stock market had been going up, up, up, up, up, and then right around September 1st, we've entered into this new pullback. So for the last month, it's about six weeks now, the market has been in a pullback. Okay, something came along and knocked it out of its uptrend. And what was that? Why are we seeing this pullback now all of a sudden? Why wasn't the pullback here or pullback here? I think there's a few things. Number one, we have seasonality in the stock market. In general, in the long run, the three months, the three worst months for the stock market is typically August, September, and part of October. Okay, so we're seeing some seasonality here. It's a little bit deeper pullback than probably the last couple of years that I have to go back in time. But August, September, part of October, you can typically see pullbacks. So I'm not really concerned so much with this pullback. Other news items, COVID's still out there, inflation's creeping up. In the US at least, there's rumblings about the debt ceiling, and the Federal Reserve, that might start taking interest rates higher. So there's a lot of this narrative out there that can spook the market in the short run. But in the end, it's all about how well are the companies within the index is performing? Are they still selling their products? People are still buying, earnings are going up, earnings are going up quarter after quarter. That means the stock prices have to move up. But in the short run, you get these news items seasonality that can take the market down for shorter periods of time. If we go back out to the monthly chart where we can look back to early 1990s, we can see the market just goes up over time. Even though there's news items out there, we had the financial meltdown, there's wars overseas, there's just COVID came along, but we can see how COVID was very short-lived as far as the stock market goes. So you've got these narratives that are always out there, but the stock market will always pick itself back up. So what are we seeing right now? Let me take a quick look here. Now, it was in the uptrend, now it's in the downtrend. And I draw these, they're called channels, they're price channels. When a stock bounces for a long period of time or a period of months, you can draw these trend lines that will help you gauge where a stock may pull back to or hit some resistance. And after like two months or so, you can connect the tops of the recent ranges, connect the bottoms, and you can project out with the lines. And you can see how the stock, this index, the S&P 500 has been bouncing in this uptrend. So if you're trying to time your trades, you can wait for it to bounce off the bottom leg, or if you're looking to sell or get out of positions, you can wait to see if it hits some resistance at the top, and it'll pull back. Apparently now, up on September 1st, it didn't bounce off the bottom and now it's created this new little downtrending channel here. So right now we're in a downtrending channel. If I was to get bullish and wanted to get long, now I have to wait for the market to come outside of this new downtrending channel, maybe trade sideways for a bit and start to move higher. Now we can see the downtrending lines that I've drawn this channel on Thursday and Friday this past week. So that was October 7th and 8th, 2021. The S&P 500 had a nice bounce up from the sell-off has moved outside and above the downtrending channel. You can see it right here. These two days has moved outside of the downtrending channel. That's a good sign, that's something that's good. I like to see that. I need a little more confirmation, maybe another week's worth of trading outside some sideways action and or some upwards movement. So sort of in a hold pattern right now, for me, if I was to look to get long or bullish on the stock market, because we could get another pullback back within the channel, the more days it spends outside of the channel, either sideways or moving higher, the more confident that I would feel that the next leg of the bull market will be starting. Now, typically towards the end of October, November, December are usually pretty bullish times of the year. So I'm hoping that seasonality at the end of the year will get that push higher. Let's take a quick look at the NASDAQ as represented by the QQQ and we'll see what was happening there. Now, what I like to do is I haven't drawn my channel here. So what we'll do is we'll just, you connect some of the tops of a recent range and you connect the bottom. So now you have this channel here. So the QQQ is represented by the NASDAQ, represented by the QQQ has, is still within the channel. Okay, it hasn't popped out of outside of it. So we may see some resistance here and there's potential for the stock market to keep coming down towards the lower end of this channel. We don't know that yet. Next week, maybe we get some really good news and we'll start to pop out of it and move higher again or it will continue to move lower. So I'm not calling the end of this little sell-off yet. I think we may have some more room to move on the downside. You know, right now I'm treading lightly because once the stocks or markets in a downtrend, there's really no reason to step heavy into getting bullish until the market or the price action tells you to. It's all about the price action, right? We had the nice up move, but now it's telling me it's in a little downtrend. Why get into a bullish position while it's still showing you there's potential for more downside? It'll just frustrate you, you don't wanna do that. So I'm waiting for some confirmation. I'm waiting for the market to pop out of this little downtrending channel and move some sideways action and maybe go higher. Let's take a quick look at the Dow. See what the Dow is doing. I don't pay as much attention to the Dow because it only has 30 stocks in that index. Let's see what's going on. So the Dow is in a little bit of a downtrend, not as much as the S&P 500 or the NASDAQ. We can draw some support lines. Let's, we have the resistance up here. You draw the line, you got a little resistance on the top and then you have, you've got some, maybe some support here. And it's in the eye of the beholder. Not everyone sees the same things. People can draw lines differently. It's not an exact science. It's not an exact science. So we've got this little bit of a channel here. We have the moving averages. So the Dow is sort of trading more sideways than anything right now. All-time highs was here. So we're really not that far off the highs. So the Dow will probably get its cue from the S&P 500 or the NASDAQ. It's kind of moving sideways, not much happening with the Dow. Let's take a quick look at some individual stocks now as we typically do. But to sum up here in the indexes, I'm waiting for a little more confirmation of sideways action or higher. There could be more selling involved at this moment in time until the market tells us otherwise. So let's take a look at some individual stocks. Take a look at Apple. We typically tend to look at the more popular high volume stocks. Okay, so this is Apple. What can we say about Apple? Oh, and I forgot to mention my technical indicator down here is the RSI. It's a 14-day RSI indicator. It's an overbought, oversold indicator. The default is the 75 and 25 levels. It's from zero to 100. 100 would be the most overbought a stock can get. Zero is the most oversold it can get. The default numbers are at 75 and 25. You can see the vertical, the horizontal lines here. I've moved my lines out to the 80 and 20 level to give me even more of an opportunity to see if a stock is overbought or oversold. And it will bounce within that range. It doesn't mean, when it's overbought, it doesn't mean it's going to drop right at that moment in time, it could take a little while. And when it's oversold, it doesn't mean it's going to reverse higher right then and there. It's just giving you an advanced warning that a market's a little overheated or a little oversold, just keep an eye on it. But for now, we're looking at Apple. Here's the price action. Here's some channel that I drew. Head has dropped below the channel. It's still remaining above the 200 day moving average. Apple's kind of, the chart's a little ugly. It's not in a perfect uptrend. You have ups and downs and ups and downs. It's still moving upwards, but not as strong as the general indexes. So Apple's a little bit ugly here. You know, try to pop above the channel has fallen back below the channel. It's trading below the 20 day and 50 day moving averages, but still above the 200 day. So Apple will probably meander sideways here for a little bit. The RSI, not completely oversold, but certainly in a downtrend. So Apple, I wouldn't say bullish or bear strongly in either direction right now. It's just kind of moving sideways here. So if you're trying to get in, it might frustrate you a little bit because it doesn't have a lot of follow through so much on either direction. It goes up, it goes down. So Apple, not so interesting for me at the moment. Let's take a look at Tesla. Tesla is still in this, I drew this uptrending channel not that long ago. So it's stuck in this uptrending channel kind of hovering near the highs. It's above all the moving averages, which is good. And you also like to see which way the moving averages are sloping. Right now they're all sloping upwards. That means the stock has good upwards momentum. If the moving averages are sloping downwards, that means the stock is probably moving down as well. So you kind of want to wait for a little bit of a turn before you really engage in a new bullish position. But Tesla's been in this channel. The next possible move will probably maybe come down to the downside a little bit, maybe a little reversal, not too much. It may try to tag the 20 day or 50 day or come all the way down to the uptrending bottom leg of the channel. Hard to say, or it could just keep moving up. But Tesla definitely in an uptrend. So having more of a bullish position is probably a smarter bet than having a bearish position. Tesla's moving upwards. RSI, not really oversold, overbought, just kind of in the middle. So that's not telling us anything either. So bottom line is I would rather be bullish than bearish on Tesla. Let's take a look at Amazon. And it's all about trying to look at the patterns, look at the channels, see what the stock's doing, where's the trend, where's the price action. That'll help you get into a trade at a better time. So Amazon, and we can always get rid of these lines and make new ones, because the pattern is still playing out here. It's just stuck in this very, very long channel. Okay, it just, it can't really break itself free from, now where you wanna draw the lines, you can connect the extreme bottoms of past moves and try to connect where most of the tops have been. So you can see Amazon popped above the channel, but then it came back in, it had this earnings washout right here. And then it's just kind of been bouncing around, kind of hugging off the moving averages. So Amazon still trading within this wide range. You know, it is very expensive. So there's not much happening either way. Yes, you can maybe do some intraday trading or a couple of weeks, but not much in the long run for me at the moment on Amazon. Let's see what other stocks we have that are worth noting. We look at Oracle, we love Oracle. We have a put sell on Oracle, and Oracle's just in this nice uptrending channel. Had a blast off here yesterday, Friday, October 8th. Let's see, is that's all-time highs for Oracle, yep. So Oracle's making, has made all-time new highs. This is the monthly chart. So here, Oracle's just looking strong. The R-size not overbought yet. So there could be more upside to come on Oracle. You may have a little bit of a pullback because this is a pretty good move here this last week of trading. Has bucked the trend in the overall market. Oracle's strong. We sold put option on Oracle and our service, which we like. So this is working out for us. Oracle, let's take a look at Cisco. Cisco, I like the company as well. Getting close to impossible, put sell position, but it's in this downtrend, okay? It's in the downtrend. So it hasn't told me yet that it's ready to start a new uptrend. You know, the 200-day moving average is the next line in the sand. Moving down in the R-size, so it could be a potential for the next leg higher. I'm watching it for a little bit more. Let's take a quick look at, and I've been talking about Clorox of late, why you would not want to get into a bullish position on a stock until it shows you that it's ready to move up. Now, Clorox was a darling during the pandemic and then last August, it just started in this downtrend, which it's still in now. So trying to pick bottoms, trying to, you know, it's a great company, but why get long on a stock while it's in a downtrend? A lot of people don't watch stock charts. They just know that Clorox is a great company. I'm gonna buy in. I'm gonna buy in now. But eventually maybe you'll be right and the stock will go up, but let's just say you bought here or here. Well, the stock's still going down, even though it's a great company, you're not getting anything out of it because it's not giving you any price appreciation. So if you're looking to get into a stock, at least look at a stock chart to see which way the stock is moving. Now, Clorox has sort of entered this sideways channel. It had the nice move down and now it's moving sideways. So maybe it's found a bottom here. Maybe they figured, the market's figured $160 a share is the bottom for Clorox. It's not going any lower. It's tried a couple of times to get through 160, not happening. So maybe the next move here is to move back to the top of the channel and maybe eventually get out of the channel and at least above the 200-day moving average. So I know Clorox is a great company, but I wouldn't buy in yet because it's not showing me it's time to buy in yet. When will that happen? When would I feel good about buying in? If I was to buy Clorox, I'd have to see it move out of the channel and probably above the downtrending 200-day moving average. So somewhere between $185 and $190 a share is probably when I would consider, okay, it's safe to get into Clorox. It's got new upwards momentum and that should keep going. Yeah, I may miss buying at the bottom, but I'll be buying at a time when it's got the momentum behind it. But if you're really itching to get in, then I always say you could nibble. You can buy a few shares, buy a handful of shares. Don't blow everything that you have. Buy a little down here and then if you're right, you can say, yep, I bought the bottom. And if not, then you wait for confirmation. All right, so that's some of the things we look for. Downtrending stock, even though it may be a great company, you want to time it a little better and wait for it to show you some upwards momentum. Let's take a look at my list here, see what other stocks we have. Microsoft, still looking pretty good. You know, it was in this channel. We drew the channel way back here, went above the channel and it's had a little pullback with the general market, but still pretty strong Intel. Intel just not doing much for me. I wouldn't really do anything with Intel. It just kind of has them downwards momentum, trying to move, been moving sideways here. So maybe it's sort of finding a bottom. You can see a little bit of a rounded bottom potential. Maybe we'll start to move higher. But for me right now, I'm just keeping an eye on Intel. It's not telling me that it's really time to get a full on bullish position yet. So I'm just watching the price action. And for Intel, not so convinced that it's time yet. Let's see what else we have. Oh yeah, AMD we always look at. We look at AMD. So AMD, so I had some W patterns, some channels, a bigger channel. All these things that you can draw on your chart to help you gauge when it may be time to get in and or get out. We can see here, so let's take these lines off. And it's okay to remove old lines. I mean, stocks move in different directions all the time. We can see we had support here. So it looks like AMD's got pretty solid support right around the 100 level. Okay, you can draw a line here. All right, so it has support. It tried to break down below 100, one, two, three, four, almost four times it tried to break below it. Couldn't get it. It was rebuffed each time. So we're hoping that AMD will continue to move higher. It's got a little bit of a down look to it. We can also draw sort of the triangle here. Typically this would be a bearish position where a bearish pattern where it keeps moving down along the top line here and eventually it'll pop through support but it's got good support here. So I'm waiting to see what's gonna happen. AMD might tick a little bit tighter in this end of the triangle here and then pop above it or pop below. So I'm holding out here. Now the next round of earnings is happening pretty soon. Earnings is gonna get underway starting next week and for the next few weeks we're gonna have lots of companies putting out earnings. So I don't really like to get into position before the earnings announcement. So especially with AMD I think it announces earnings towards the end of October, maybe the third week of October. So I may just sit and watch, see what AMD does if it fulfill the rest of this triangle here and start to move up or move down and nothing may not happen until it's earnings announcement. So it may just be storing up this energy until earnings comes out. So that's AMD. We had a position on it and we took profits on it and now we got out. Let's see what else we have. We looked at Netflix. Netflix is doing pretty good. Been bucking the trend was in this channel for a long period of time, finally moved above it was hugging the 20 day moving average and has blasted off. So we have all time new highs. Let's just make sure that's right. Yep, all time new highs for Netflix. Netflix is strong. Netflix looks good. If you're trying to time your next bullish entry at this point you may wanna see if it pulls back to the 20 day moving average if you're trying to time a bullish trade Netflix looks pretty good as a bullish contender. Procter and Gamble, Walmart. Let's take a quick look at Walmart because I personally got into some Walmart down near the lows last week. I was just too much of a pullback for me not to get in. Now I say, why would I want to get long a stock when it's in a downtrend? Well, sometimes I go outside of my own rules, gut reaction, but the main reason why is because the RSI got into extremely oversold levels. Hit down in the 20s here, 20 on the RSI. That was my cue that, you know what? Walmart's a great company. If I wanna hold Walmart for the long run, I'm holding for the long run. And every once in a while pullbacks are just too extreme and you could nibble. And that's what I did. I nibbled, I bought some shares on the lows here and look, it's popped back. Okay, got in around down here, 136, 137 or so and now it's around just under 140. So it's moving back up. Walmart could certainly continue to move back down, but for me, I was taking a calculated risk. I bought some shares, but I know in the long run, Walmart will go back over time. For now I may have to sit and wait a little bit, but that was a personal decision that I made. What else do we have? Disney, everyone loves Disney, right? Hard not to love Disney, but right now it's in this channel. Was in the up trend, down trend, sideways trend. That's how stocks move. They go up, down, sideways. So Disney's sort of in the sideways action here. If it can get above, I don't know, maybe 185 or so it may have the momentum to keep moving higher. You got the seasonality of the end of the year coming. So we may see a lot of stocks start to move higher. So Disney's sort of in this channel here. I would probably wait till it starts to move up maybe in the 185, 190 level to see if I wanted to or when I would want to get long some of those shares. What else we got? So the pharmaceutical stocks are getting hit pretty good. We've taken a position in Bristol Myers, a put-sell position, had a lot of cushion right here. Also was way oversold. That was around $60 a share. We sold some put options, strike prices down here. We gave ourselves a lot of cushion. Stocks still moving down. Friday, yesterday had a big move down. I'm not really sure what that was all about. Getting back down into the oversold territory again. This is an extreme move for a company like Bristol Myers. This is Bristol Myers. We took a stab on a put-sell. We may have to roll the trade and invoke some defense mechanism, but not yet. So we're watching, waiting. Eli Lilly, let's just look at some of these healthcare stocks. Eli Lilly's in a down move. Pfizer, Pfizer in a down move. Johnson and Johnson. All these pharmaceuticals are in the downtrend. Kind of hovering around the oversold areas. Eventually these are gonna be buys. Eventually all these stocks will be buys. Now Merck had came out with the news that they have a pill that is like the COVID vaccine but in a pill format. So that's why Merck jumped big this past week. So Merck's bucking the trend of the rest of the pharmaceuticals. But in general, pharmaceutical companies will be bought back up. Just, it's the timing, when is it gonna happen? So keep an eye on those. We're keeping an eye on Bristol Myers as we have a position there. Facebook. We had a spread position in Facebook that we got out of. I didn't like the move down. I didn't like the news headlines that were coming out of Facebook the last week or so. Plus they have outages. I said it's time to get out. Sometimes you're wrong. Not every position's going to work out. We got out of Facebook. So it was in this downtrend. Probably gonna find support here at the 200 day moving average. But Facebook right now, I've got nothing on Facebook. I don't like the down move. I don't like the news out coming out of the company right now. So there's nothing for us on Facebook. Google always looking strong. Google just keeps going up. What else do we have? It's about it for our individual stocks, the ones we like to look at. Costco is always a strong stock. Got some sideways action. McDonald's. Let's take a closer look at McDonald's. McDonald's looks good. Was in the sideways action. Has a nice rounded, nice upwards moving stock. All the moving averages are sloping upwards. The RSI is right in the middle. So it's not overbought, not oversold. So McDonald's has some good momentum behind it. If you're looking to get long, and maybe see if it pulls back to the 20 day or 50 day as a timing mechanism. But in the long run, McDonald's is moving up strong stock. All right, so quickly one more time. SPY. For me, I need to see some more bullish action outside of the downtrending channel. And like to see it start to move up. So I'm gonna be a little bit more of a wait and see attitude. We've got earnings coming up in the next few weeks. So it could be a little hands off for now. All right, so that's what I'm seeing in the market. That's it. I hope this is helpful for you all to see how you can look at stocks, draw patterns, check your moving averages. Just watch the price action. It'll help you quite a bit. All right, let's take a quick look at our website here. Smart options seller website. We're big put option sellers here. If you want a free copy, if you know nothing about selling put options, just download our free guide. Go to our website, click on the put selling basics. This is a guide that I wrote. Put your name and email address here. We'll send you a free copy. Here's our services tab. You can click on any of these things. Anything, all this other free stuff is to help you all. Give you some good options information. Our paid services right here, we have two newsletters and our coaching sessions if you need a little help, okay? So I hope this video has been helpful. Give me a thumbs up, leave me a comment. If you would, I love hearing from you. Send me an email. I'll always answer your emails and don't forget to subscribe to this channel. Hit that red subscribe button in the bottom right hand corner of this video. All right, that's all for me today. We're getting on close to 35 minutes now. I hope everyone has a great weekend and a great trading week ahead. I hope to see you back here next Saturday. This is Lee Lowell signing off.