 Hey everyone, Lee Lowell here, smartopsinseller.com. Today is Saturday, August 7th, 2021. Welcome to another edition of our Saturday Synopsis. We take a look at the charts, we look at the indexes, we look at individual stocks and we try to see what's been happening. I'm here to teach you, try to help you become a better and smarter trader. In my service, smartopsinseller, I use the charts exclusively to try to help me gauge where a stock or index will be going in the future and that is how I make my trades. I base it all on the charts, technical analysis, pattern support and resistance. So that is what I use to help me decide when it's time to get in and or out of a trade. And this is why I make these videos to help you, try to give you some of my knowledge, use some of my experience to help your learning curve. So this is what we do. So let's jump right in and talk about what's been happening in the markets. As you may know, if you've been watching these videos, we always start with the SPY, which is the Exchange Traded Fund for the S&P 500, gives us the best overall, broadest view of the market. So we like to take a look at the S&P 500 first. And the SPY is the Exchange Traded Fund, which trades just like a stock. So we like to see how it's been doing. So what has been happening in the market? Let me blow this up a little bit here. If you've been watching my videos on Saturdays, you know I've been bullish, been bullish for a long time because the market is telling us it wants to be bullish. So we go along for the ride. As you can see right here, this is a daily chart of the SPY. Each vertical bar, each vertical line is one day's worth of trading. And as you can see right here, this was Friday, August 6th, 2021. This bar made all-time new highs again for the S&P 500. This is a daily chart, okay? So we can see it goes back on my screen real estate here. Goes back to, you know, it's about a two-year range, okay, that you can see on the chart here. But what we can also do is look at a monthly chart. This goes all the way back to the early 1990s. As you can see, the S&P 500 has gone up all-time new highs. Now, yes, we were flat for a number of years, number of years, bottomed out in 2008, 2009 financial crisis, and look at this trajectory just since then. So it's been incredible. Let's go back to the daily chart. So S&P 500 right here, all-time new highs. The market looks strong. What do I use on my charts to help me gauge where the market is going? I have three moving averages that I use. I try to keep it simple. I don't use a lot of technical indicators because I've tried over the years. I've looked at many indicators and I feel it just jumbles up the chart. So this is what I've honed in on. This is what it's come down to for me. I have three moving averages. I've got a 20-day simple, a 50-day simple, and a 200-day simple moving average. Down here, I have the RSI, which is the overbought, oversold indicator, a 14-day RSI. I use the 80-level and the 20-level. You can set those parameters yourself. You can set the day amounts of days. I use the 14-day. And I use the overbought and oversold levels to kind of give me a gauge of whether a market is entering overbought territory or oversold territory. It doesn't tell me a market turns about to happen. It just tells me that things are either getting overheated or oversold. And I take that in conjunction with what I see up here. And I also use patterns, lots of different patterns to help me gauge where stock may be going next. This is what's called the W pattern. We've got congestion patterns here, these triangles. This is an ascending wedge pattern. So there's all these chart patterns that you can use to help you gauge where stock may be going next. And you can find these patterns online. Just do a Google search. I've shown some websites before where you can look up these chart patterns. So these help us gauge where a market might be going. And I keep these on the chart so you can see what we've been talking about over the last couple of months. So the SAP 500, the market in general is looking strong. And what happens is once you have a market that's trending, in this case, trending upwards, it will usually tag along moving average lines, 20 day or 50 day. When you have a nice, strongly up-trending market or even down-trending market, they will typically bounce off of the 20 day or 50 day moving average. As you can see the SAP 500, when it has a pullback, it either pulls back to the 50 day or 20 day. And you could almost be assured that it will bounce and continue up with the trend. Even here where it's fallen for a couple of days below the 50 day, it still regains its composure and starts to move higher again. So don't think that just because a market has fallen below a moving average, it means, oh, here comes the next bear market, not so. I like to use what I call my three-day gauge here. Like when a market falls below a major moving average like this, I like to see at least, I give it three days to stay below or fall below a moving average before I decide, well, maybe a turn in the market is coming. So we really haven't seen three days below major moving averages before it starts to bounce. Now down here in the W pattern, yes, the market was a couple of days below, but it did pop back up again. So even if it falls below moving averages for more than a couple of days, you can still watch it. Doesn't mean you have to take a trade right then and there. So the market's looking strong. As I say, each week the market is like physics and object in motion tends to stay in that same motion until something comes along and pushes it in another direction. You have an uptrending market that's bouncing off the moving average lines. Nothing has come along yet to knock it down into a different direction, meaning bearish in this case. Now there's some things happening here in the US. We have the coronavirus, the Delta variant is certainly still around. People are getting sick, but vaccinations are happening. We got about half of the US population vaccinated now. And so that comes into consideration every now and again with the market. If there's a sell-off, the narrative will be, oh, well, people are getting sick again. But on the other hand, we have earnings that have been coming out. Companies are still producing good earnings. Their outlooks for the future is still good. So that's really what's going to drive stock prices in the long run. It's the outlook for companies on their future and how they've done on their prior quarters worth of earnings. Earnings is what determines where stock price goes. If a company is selling a lot of products and making money every quarter, obviously the stock price is going to go up. If the company is not producing earnings, not producing sales and they're burning through cash, the stock price is going to go down. Yes, we have these backdrop of other news items, narratives of rising interest rates, unemployment, the coronavirus, yes, those things are out there that can affect market movements. But in the long run, those stories will go away at some point and the earnings of a company is what eventually will keep a market going. Now, we can go back and look at the S&P 500 over time. We've had multiple wars, we've had pandemics, we've had recessions, the Great Recession in 2008, but the market always finds its footing and goes higher. That's how the market works because the S&P 500, the Dow Jones Industrial, the Nasdaq are all made up of companies that are producing products that people buy and have real earnings that keep increasing over time. That's why stock prices go up. In the short run, stock prices can get hit because of fear out there in the world, which is valid, but it can only last for so long, right? The pandemic was barely a blip in March 2020. I mean, it came down really hard, but look how fast it turned around. So stock prices are going to be driven by how the companies do. And in this case right now, companies in the S&P 500 are doing well. That's why the market keeps going up. So when you have a pullback like this, here's a pullback here, pullback here, pullback here, it doesn't mean the next bear market is starting. It just means we have normal ebbs and flows, markets pullback, that's just what they do. And so you can use the support of the 20-day or 50-day moving average as your guide of, hey, I wanna get long on this stock or this index, this is my timing pattern. This is where I could look to get in, okay? And even if it falls below the moving average, watch it. You know, you could always nibble on a few shares first or wait for it to bounce before you go a little bit stronger into the trade, okay? So that's, I wanna clear the air and let everyone know this is how the markets work, this is how stock prices move, they bounce off moving averages, they form chart patterns, that's how it is. So let's take a look at the NASDAQ. We'll look at the triple Qs as a proxy for the NASDAQ. Just like the SPY, the QQQ is exchange traded fund, NASDAQ. Again, daily chart, hit all time new highs again this week and the market looks good. It's hugging the 20-day moving average, the 50-day moving average is there below. Now the NASDAQ came down below the 50-day for a number of days. So in that case, you wait and watch. Wait and watch to see if it's got more downside to come or if it will bounce back. Obviously it bounced back and it's bounced back pretty hard. So you can still use the 20-day and 50-day as a gauge. Now the 200-day has not been touched yet in a long time. That's sort of the granddaddy of moving averages. That's basically the last line in the sand for a lot of stocks or indexes that will be a make or break point. So we haven't seen anything touch the 200-day moving average in a long time. So the market looks good. I'm remaining bullish until something tells me that's coming along to move it in another direction. Let's look at the Dow here for a second. Let me pull up my index here, the Dow right here. Now we've been talking about the Dow and the markets have been pretty flat. Summertime things can get flat. Here's the ascending triangle pattern. This is a bullish pattern where you connect the uptrending lows of however many points you want to use. I can even connect these lows down here. You can draw a line here connecting some of the lows. It depends how far back you want to go. But obviously the market's going up and it hits this resistance pattern right here. It's a resistance top that the market will try for a number of times to get through this resistance and eventually it'll either crack through it or it'll fail and it'll come down below the triangle. As you can see right here, look at all this pressure building to get up through this resistance line. And right here, yesterday, Friday, August 6th, 2021, the market seems to convincingly have popped above resistance right here. So that is a sign that, hey, I think we've blasted through the resistance. Let's keep this party going. I have to believe that over the next couple of weeks, you will start to see it either will congest here above the line or just have a vertical move higher. So things look good for the Dow, S&P 500 and NASAC. And yes, this was all time new highs right here for the Dow Jones. Things are looking good. Let's take a look at some individual stocks as we do each week. We always start with Apple. We look at these NASDAQ stocks. A lot of these NASDAQ stocks are favorites of a lot of people and they have a lot of news stories. There's a lot of excitement around these high tech stocks because they're the ones that move. So Apple finally has hit an all-time new high just recently. Here's the resistance line I have up here. Some may call this a double top. Double top can be a bearish trade for a short period of time while the stock regains composure. Got a little congestion pattern right here. I don't know if you can see this blue triangle side of a triangle right here. So Apple's kind of congesting here, made all-time new highs kind of congesting. Will it get above 150 where it hit all-time new highs? I think eventually it will happen. It's gearing up, storing up some energy from possible next move higher or maybe it'll come back down and tag the uptrending 50-day moving average. It's yet to be seen. Apple could move sideways for a short period of time. Depending how strong the general market is or it could bust up through resistance. But I think for now we may see some more sideways action here below this 150 line but Apple certainly has finally gotten off its keyster and moved higher. Let's take a look at Tesla. Tesla. So we had drawn this congestion triangle pattern right here and what that means is that the ranges, the daily ranges gets tighter and tighter and tighter and tighter until it has nowhere to go but a power move higher or a power move lower. And you can see this past week it powered up higher out of this big congestion pattern. Trading right around $700 a share. I mean the chart still kind of looks ugly in a way. And you can even draw a larger triangle here. So there's a lot of things happening with Tesla congestion in this major area but I think this moved this week up out of this triangle is good news for Tesla. It probably wants to keep going higher but it's still kind of jumbled here but I'd have to lean to the side of being bullish for the next move for Tesla. Let's look at Amazon because Amazon was doing well. Let's open this up a little bit. Had been in this long channel here and finally broke above it. Finally broke above it as looking like it was gonna stay above it until earnings came out last week. Amazon dropped about $300 a share. It's a big move for Amazon and you know what it's done? Now it's knocked it back down inside this channel. So Amazon back in the channel will probably remain in the channel for the foreseeable future until maybe next quarter's earnings because people wanna see what Amazon's going to do. So I have to believe Amazon will stay in this range for a while. I don't see it breaking up above resistance and I don't see it coming all the way back down here. So look for more sideways action for Amazon. I wanna talk about AMD. AMD, one of my favorite stocks. And I'm so angry that we missed this trade. Right here when it was hitting on around $85 a share it had a nice pullback and that was our cue to get in. When we sell put options, that's what we do for bullish trades. We sell put options here at the smart option seller. And we try to get in right here on this low and we missed the trade, couldn't get filled on the put options that we were trying to sell and then the market just took off without us. I love the company. It blasted through this resistance line here. It bounced nicely off the moving average. It was a perfect setup. And look from $85 all the way up to $122, $123. It's just a massive move in a very short period of time. That's big for AMD. It's never moved like that before. So it had a little bit of pullback the last couple of days this week. I'm hoping to see maybe a little bit more of a pullback have the moving averages start to move up. So price comes down, moving averages go up, but maybe they'll meet somewhere here in the middle. And that could possibly be our next opportunity to get long for the next leg up for AMD. So I'm hoping we'll see a little bit of a pullback moving average and move up because I don't wanna buy it up here. This is still a little bit too overbought for me. I don't wanna jump in here yet. I'm waiting for a little bit of a pullback. Will the pullback come? I'm hoping, no guarantee. But after a harsh, strong move like that, the stock needs some congestion, people need to take some profits. So I'm hoping that we'll see a little bit of pullback here, moving averages move up, and then it'll give us an opportunity. Let's take a look at, also Eli Lilly has had a power move higher. Eli Lilly's just, look at this, been hugging the 20 day moving average. So you use these moving averages as your gauge or your key or your timing to get long, if that's what you wanna do. See how it powered higher, but then had a nice little pullback, moving average line moved upwards, so it met up right here. Same thing, move up, met the moving average line, and then continue to go higher. I have to believe this little power higher is gonna have the same thing that this one had. You'll have the pullback, and the moving averages will move up to meet it, and then it's all clear for its next leg higher. That's how the pricing works, that's how stocks move. They stay in that same trajectory, but they engage with the moving averages. That's what you wanna see, and you look for the patterns as well. Let's see what else we can take a look at here. Walmart is another one that I liked this week. Walmart got some buy signals. You have, let's draw some lines here. So you've had the uptrending line here, you kinda connect the bottoms, and then you have the resistance at the top right here, which forms the other part of the ascending wedge or triangle, whatever you wanna call it. And Walmart popped above it this week, so I like the action, I like this upward movement, I like it moving through resistance. I like Walmart maybe congesting here a little bit because it has to congest, made a power move above resistance. So it has to figure out, okay, are we really happy that we busted through resistance? May have a little sideways action, and then everyone says, yeah, let's go, and then the stock will continue to move higher. That's what I'm seeing. So I like Walmart here, I hope it continues higher. Netflix, they take Netflix still, still in this long channel right here. So Netflix has just been hugging, between 4.75 to 5.75, still in this range. If you're an option seller, this has been a dream come true for you. If you sell iron condors or strangles on Netflix, it's been great for you over the last year. Procter and Gamble, same thing. Had this little sideways channel has blasted through it, hugging the 20 day moving average. I think I like Procter and Gamble for a continue move higher, great company as well. Stall work, good dividend payer. Let's see what else we have. Disney also, okay, so we've drawn some chart patterns on Disney. So Disney had been moving up since the pandemic, but then got down into this channel here. So this is a situation where physics took over. Disney had been in this nice uptrending channel. We'll just draw it here so you can see it. Was in the uptrending channel, and then something came along to knock it in another direction. So Disney entered this down trending channel. But what's been happening here is that now it's got support, found support down here and had somewhat of a sideways channel, which is good. That means it's trying to find its footing, find its bottom. And I think that Disney may have turned the corner and we're looking to see if it can get above this resistance line and start a new leg higher for a future uptrend, okay? So watch Disney, if it gets above this resistance line and starts to move higher, that should be the all clear that the next leg higher is coming and it should take it out. It's all time highs here, near $200 a share. Let's see if those are in fact the all time highs for Disney. Look at a monthly chart, yep. So we're definitely at all time highs. It was hit in April. So let's go back to the daily chart, yep. Right here. Here's the all time highs for Disney. So I think what this sideways action gets above resistance line should be the all clear for Disney to start moving higher. What else do we have? Let's take a look at Coca-Cola because I've been talking about Coca-Cola in our newsletter. I like the price action for Coca-Cola. I like that it's been trending higher. It's hugging off the 20 day moving average. I think it's congesting here a little and I think the next leg higher is about to come. It has a nice little uptrend here. Coca's a stalwart. It moves slow, great dividend. So it's good for long term portfolios. If you hold it for 10, 20, 30 years, whatever. Coca's here to stay and it's in a nice trend. I think we have the all clear that, okay, the next leg higher should be happening. So I'm gonna be watching Coke for a little while longer. McDonald's came back down at the channel. Pepsi, Pepsi looks good. Pepsi's in an uptrend. Pull back to the 20 day moving average. Let's see if it could hold here and move back up again. So we've got, they've got some work to do or it could fall down to the 50 day moving average. I've got nothing on Pepsi right now. Twitter, okay, so let's take a look at Twitter real quick. Twitter's been in this uptrend. We actually have a position in our newsletter. We've sold some put options on Twitter. Our strike price is down here. So we have some room for error. And we have this uptrending channel. You can see yesterday it's falling out of the channel right here. So we have to keep an eye on it, see where it wants to go. Our next line is the uptrending 50 day moving average. Will it bounce off of it and continue to move higher or will it fall below? We don't know yet, but we're in wait and see mode on Twitter, I wouldn't say anything else about Twitter right now, just watching this channel. Facebook, Facebook. So Facebook, we also have a position in Facebook. I like the uptrending channel here. You can draw the lines. You know, here's your support line. It's also in the channel. So Facebook is in a nice uptrending channel. I don't really see anything that's going to derail it. It should bounce off the bottom edge here when and if it pulls back. You can see it's been bouncing pretty good, but it's in an overall uptrend like that. What else do we have? That's pretty much it here. Let's take a quick look at Clorox. Cause I like to use that as a gauge of, you know, how to gauge where stocks are going. So Clorox was in this nice uptrend and then something knocked it down in the other direction. So it had been in this downtrend. Looked like just very recently, looked like it was starting another uptrend, possibly to move back up again, but had the earnings right here got knocked it back down. So now it's got this island bottom here, whether you got a lot of space gaps here. So Clorox is down here, waiting to see what happens next, no position here, but it looked like it was ready to go and then it had earnings. So you got to be careful. When we trade, we always trade in between those three months of earnings announcements. Once the earnings comes out, then you have a three month grace period where there shouldn't be any major news and that's the best time to make your trades in that three month period. So that's how we gauge our trades and make our trades in smartoptionsseller.com. Two to three months is really all we need for a trade to play out with us. So we time it in between earnings announcements. Earnings announcements can make or break you. So you want to have your positions closed out, but for earnings, unless you're holding for years and years and years, the shorter term traders, you want to trade in between earnings. All right, well, I think that's about it for the markets here in general. Let's take a quick look at the VIX. Haven't looked at the VIX in a while. This is the volatility indicator for the market based on the SAP 500 options. Volatility has come down greatly since the pandemic, hit the highs here, and it's just been coming down since getting back to its all time, not all time lows, but longer time average prices between 10 and 20% in the VIX. It's pretty low right now, 16%. So that means people are complacent, the market's going up, things aren't as volatile. So that's good, we like that. All right, one more time SAP 500, things look good. Market's going up, it's got support from moving averages. I'm staying long staying bolts until the price action tells me otherwise. All right, so that's it for your Saturday synopsis. Let's quickly go to our website. We always talk about selling put options, that's what we do here at the smart option seller. Don't forget to get your free put selling basics guide from us, go to our website smartoptionseller.com, click on the put selling basics, scroll down here to the bottom, put in your name and email address, we'll send you a free copy. Also on our website, our services tab talks about our two newsletters and our coaching sessions if you need help getting to that next level. All right, don't forget to subscribe to this YouTube channel, hit that red subscribe button. Turn on your notifications so you'll always know when I put out a new video. Leave me a thumbs up if you like, if you think this has been helpful, give me a comment, send me an email, I will always answer. All right, that's all for me today. I hope everyone has a great weekend and a great trading week ahead. This is Lee Lowell signing off.