 Yes, hello everyone, I am back again. This is Lee Lowell from smartoptionseller.com. It is Saturday, October 16, 2021. Welcome to another edition of our Saturday synopsis videos. What do we do? We look at charts, that's what we do. I'm a technical analyst, which means I'm a chart reader. This is what I do. I am here to help you with your own trading. For 30 years I've been in this business. I'd say 95% of my own trading decisions are based on what I see on the charts. You've got fundamental analysis, technical analysis, fundamental analysis is looking at all the details behind the scenes of a company. What are their earnings? What are their sales? What's their growth? What's their dividend? All that stuff. You can certainly look at those numbers, but the charts tell me where a stock is at that very moment in time. Is it an uptrend? Is it a downtrend? So I'm here to help you become a better trader by looking at the charts. What do we do here? We look at indexes, we look at individual stocks, we look at moving averages, we look at price patterns, we look at support and resistance, all these things that can help you gauge when it may be time to get in and or out of a position. And so I make these videos to kind of help you understand what I'm doing, what I see, how I set up my charts and what I'm looking for. So sit back, relax and let's take a look at some charts and see what we're seeing. Now, if this is your first time with us, let me just explain what I have on my screen here. This is called a stock chart. This is a snapshot of what a stock has been doing, it's price pattern over time. Now on my screen here is about two years worth of data and you can see some markings, some channels, some W patterns, some triangles. These are all chart patterns that can help you gauge an idea of where stock may be headed next. Nothing's 100% guaranteed, but it can certainly help you step into a higher probability trade. What you see in front of you is what's called a daily bar chart. Each line on here, each little vertical line is one day's worth of trading and it has an open, high, low and close. What does that mean? Well, it tells you, each bar tells you where the stock opened on that day, the high of the day, the low of the day, the top of the bar obviously is the high of the day, the low of the bar is the low, the bottom of the bar is the low of the day. And on the right side of each bar is a little dash mark that shows you where the stock closed for the day. You can see this little piece right here, got a dash mark on the right, that's where the stock closed for the day. Dash mark on the left is where it opened for the day. So these are daily bar charts and these are kind of used for longer term trading, couple months at a time, two years. You can look at one minute charts, one minute bar charts where each line is one minute's worth of trading. So these are for very hyperactive, intraday traders that like a lot of action. We use daily charts because we're not intraday traders, we're not swing traders, we're not day traders. We take a little bit of a longer term approach. And obviously you want to see, if you're bullish, you wanna see a stock moving from the bottom, left to the upper right. That means it's going up in price. That's what quality stocks are supposed to do. If you have a company that creates products that people buy and they create more products and people buy more products, the sales and earnings of that company should be increasing over time. Hence, their stock price should be going up. You won't have a stock, you won't have a company that keeps putting out good products and has increasing sales and see a stock chart going downwards. That's just not how it's supposed to work. So we are bullish here at Smart Options Seller. We look for bullish trades because we sell put options, we sell put option, credit spreads, those are more bullish types of strategies. So our goal or my goal is to find stocks that are moving upwards and are ready to move upwards after a pullback. We try to time our trades a little bit here at the Smart Options Seller. And the way we do that is we look at the charts to see where a stock may be moving within its current price pattern. So what do we like to do? Well, first we like to look at the indexes and that consists of the S&P 500, the NASDAQ 100 and the Dow Jones 30. Those are the three main stock indexes and we look at those first because they tend to lead the market. They tend to lead individual stocks. Most individual stocks don't have a lot of news going on for them on a daily basis. So there's not a lot of action. So a stock, an individual stock will tend to follow the index wherever the index is going. So we look at the indexes first. So we always look at the S&P 500 represented by the SPY which is the Exchange Traded Fund for the SP500. This is, in my opinion, the best overall view of how the market's doing as a whole. Now, since the pandemic last February, March, 2020 where we had a massive move lower, the market has just been going up since then. This is the SP500 going up. Has fits and starts, ups and downs but generally an uptrending move. So we follow the indexes. Now, also on my charts, keep it very simple. I have three moving averages which is this blue line which is a 50 day simple moving average. I have a red line, 50 day simple moving average and this line here is the 200 day simple moving average. Down here is the RSI indicator, 14 day RSI indicator. Boundaries are 80 and 20, these horizontal lines and the stock price will fluctuate within that range. Up here, 80 means the stock's getting a little overbought, 20 down here means the stock's getting a little oversold. So there's just warning signs that a stock's getting overheated or oversold and it could be due for a turn in the other direction sometime relatively in the near future. Doesn't mean it's imminent but it means it could be happening sooner than later. And you have these patterns, these are called chart patterns that typically will repeat over and over and over again that once you start to recognize these patterns you can see where a stock most likely should be moving to next. So let's take a look at the S&P 500, see where it's been, see where it's going and try to get an idea of where I see the near term direction. Now, this channel, this upper blue line and this lower blue line is, I drew those. Okay, this is all part of technical analysis. You can draw lines on your charts and the S&P 500 was in this nice uptrending channel. And then right around September 1st it entered into a downtrending channel. I base that off of seasonality of the market. Typically August, September, October could be more bearish months for the stock market. So right on cue, September 1st the market entered into this downtrend right here. And it hadn't had a decent downtrend probably since back here in February, March, earlier in the year, a little bit of pullback but kept going up. Now, one thing we like to do is when a stock is in an uptrend or even in a downtrend it tends to track along the moving averages. And when it goes up and most stocks will bounce. They go up, they go down, they go up, they go down but they go in a general trajectory which here you can see is higher. But if we try to time our trades, if we wanna be bullish, we wanna get a bullish entry we try to time it more about a pullback. A pullback to either the 20 day or 50 day moving average. So if you were able to buy some here, buy some here, buy some here as it's falling down to the moving averages falling down to the lower edge of the channel your timing could be better. Now, obviously if you just bought up here and held you're still doing very well. But some people like to time their trades to get in a little bit of a better entry. All depends on your time frame. If you're holding for years and years and years it really doesn't matter whether you bought here or here. But if you're more of a shorter term trader where your whole time could be a couple of weeks timing does play a little bit of a difference can add a better return for you. But regardless, you wanna see what the longer term picture is. So we've been an uptrend. Now we're in this little downtrend here. So if you've been watching me for the last couple of weeks you've seen that I've had this downtrend channel drawn and the market in general sort of been bouncing in this channel here. So what I've been saying for the last two weeks or so is that I need to see the market bounce outside of the downtrending upper line here which you can see this price action over the last week and a half or so is doing exactly what I wanted the market to see. If you're bullish which meant that the market started to come outside of the downtrending channel and started to move back up. We had a really good end of week this week. Here is Friday yesterday, October 15th and this is Thursday, October 14th and right here. Wednesday was the big day. Wednesday, October 13th was a really good day for the market been in the downtrend but Wednesday popped out outside of the upper channel was on the lows most of the day but ended near the high and then Thursday had a huge gap up Friday another gap up. So this is very strong. I really am excited about what happened the last three days in the market this week and it makes me believe that I'm pretty sure we are out of this downtrend now and we're ready to take the end of the year which is typically very bullish second half of October, November, December typically very bullish times of the year and I think it's just a matter of time before we hit all time new highs again. This was all time new high for the S&P 500 September 1st. I can see us eclipsing that probably within the next week or two, couple weeks at least. This was a very powerful bullish move these last few days this week and one really key thing here is that it traded above the 50 day moving average got above both the 20 day and the 50 day finished strong, finished almost on the highs yesterday which was a really good thing. So I'm very enthusiastic about the market. This was a powerful move. The market moves on momentum. When people, there's a lot of people following the same things that I'm following and when everyone sees these same signals everyone tends to have the same idea what's going to happen next is self-fulfilling prophecy and then just it snowballs on itself. So this was a very bullish sign right here Wednesday, Thursday, Friday got above the 50 day moving average got outside of, convincingly outside of the downtrending channel. So I'm really excited about this move here and I can see it just keep going up from here. Now, the NASDAQ as represented by the QQQ same thing, but not as strong as the S&P 500 and I'll explain why here. It also had a downtrending channel the Wednesday, Thursday, Friday this week was very good. Here's Thursday and Friday these last two days right here got above the downtrending channel moved out of it and I really like it. The only thing I'm concerned about is we've got this the 50 day moving average right here lurking right above, right above that could act as resistance. So next week is very telling if the NASDAQ cannot get above this 50 day moving average it might start to pull back which can also pull back the S&P 500 as well. But if it can convincingly get above this 50 day moving average and close above it then I'm all in. Then I'm like, we've got the green light for everything to keep going higher. Now, here's the all-time highs here. So it still has a little ways to go. The S&P 500 right now looks stronger than the NASDAQ. So this 50 day moving average right here is very critical next week. So keeping an eye on that, you know if it had closed above it convincingly yesterday on Friday, October 15th I'd be feeling a lot more bullish than I am now. I'm pretty bullish, but this is the only thing that's holding me back. So we'll keep an eye on that early next week and see what happens. Let's take a look at the Dow, the Dow Jones. I don't put as much emphasis on the Dow because there's only 30 stocks in that index. So it's not as not so much a leader as the NASDAQ and S&P 500s. Now the Dow sort of has been in this channel, sideways channel, you really don't see it moving as strongly as the NASDAQ or the S&P 500, but you can see the last three days here, Wednesday, Thursday, Friday, had a nice up move just like the other indexes. So the key for the Dow here is to get above this next support line here. Here's the all time highs over here. It's above the 50 day moving average as well. Got above the 20 days. So the Dow and the S&P 500 are the stronger of the three. The NASDAQ, the only thing that's holding me back is the NASDAQ did not finish above the 50 day moving average. The Dow and the S&P 500 did. So next week, very telling. I really liked how everything closed on the highs yesterday. That's strong. That shows some serious bullish momentum. So Monday, Tuesday, Wednesday, next week could be very telling on where this market wants to go. So let's take a look at some individual stocks and see what's been happening. First one I wanna bring up is Tesla. You know, I follow Tesla in our newsletters where we've been selling put option spreads, bullish put option spreads on Tesla, doing pretty good on those. Tesla's just extremely strong. We have this uptrending channel that Tesla is in and you can see now yesterday, Friday, October 15th popped out above the upper line, closed on the high of the day. You can see the little dash mark on the right side of this bar. That's where it closed. Closed on the highs. The only thing I'm thinking here is, yes, Tesla's strong, it's got great momentum behind it. The only thing I'm starting to worry about is it may be getting a little ahead of itself. It has popped above the upper channel, which is a good thing, but maybe getting a little overheated. You can see right here in the RSI could be starting to enter a little bit of overbought area. Okay, doesn't mean that it's all of a sudden gonna have a bear move. It just means, hey, we're getting a little excited here. Just be wary of a pullback. I can possibly see Tesla, I mean, it could go higher, but I could possibly see Tesla falling back within the channel and maybe having a little bit of a breather, a little bit of a pullback before the next leg higher. So just keep an eye on this. There's no guarantees, but it could be getting a little overheated up here. So that's Tesla, Tesla looks good. We sold some bull put spreads on that. We like that. Let's take a look at Apple. We tend to focus on these more popular NASDAQ-y kind of stocks because this is where a lot of the action is. But my goal here is to show you the price patterns of things I'm looking at, what I use to help me gauge where the stock might be going next. Now Apple had, it was kind of an ugly chart. It was in a downtrend, down channel moved up, came back down again, was in another up trending channel. It was sort of in this channel, it came back down. So there's, Apple's been sort of, yes, it's still been going up, but it has fits and starts. So it's been kind of aggravating at the same time because it's not a nice, clear, slow drive higher. It's, you got ups and big downs and then ups and big downs. So Apple's been a little frustrating for bullish players. Here it looked like it was definitely ready to go on its next leg higher, but it just got hit that September 1st, bare mode and came back down, dropped, you know, $15 a share. So now it's starting to work its way back up again, finished above the 20 day moving average, but it has the 50 day lurking above. And so Apple's just kind of lurking around here. Probably we'll keep going higher, but it's not that continual blast move higher that we're all, we are all hoping for if you're long Apple. So Apple's still kind of a little ugly, but you know, eventually it's going to keep moving higher. It's just, can you sit through the aggravation of these pullbacks at the same time? It's one of the reasons why we love, love, love selling options, specifically put options because we can weather these moves, right? When you sell out of the money strike prices like we do, it doesn't matter if the stock is moving sideways because time decay takes over. What's time decay? Time decay is the fact that an option price will lose value, will lose part of its value every single day as it moves towards expiration as an option seller that works in your favor. So all these fits and starts is great for option sellers. Option buyers not so good because you're fighting against time. So that's why we concentrate on selling, selling options to begin with, most we put options. Let's take a look what else we have here. You know, I wanna show you these stocks. I typically bring up Clorox just for educational purposes. Now, Clorox, great company, had the nice uptrend during the pandemic then last July, last August, it started in this massive down move, okay? Clorox, great company, hit all-time highs near 240 and now it's down to 160. Just lost $80 a share over the last year. Now you may be thinking, wow, that's a nice discount. Maybe I'll buy some shares of Clorox. Well, if you're looking at charts like I do, yeah, I'd like to buy Clorox too. It's an $80 discount from where it had been, but there's nothing in the charts that's telling me it's time to get bullish on Clorox. Why? Because it's still in this downtrending channel, but now it's gotten this sideways channel and it's flirting with potentially breaking back through the bottom of this channel here and it could end up moving continuing to go down. So I would not get bullish on Clorox yet until it showed me that it's ready to at least get above this upper line here and maybe above the downtrending 200-day moving average. So Clorox, not a bullish trade for me yet, even though it's come off a long way, there's no reason to frustrate you waiting for something to move. You can do better with your money. Now, Verizon was another stock that I was watching this week. I love Verizon as a company. It's the largest cell phone provider carrier in the U.S. and maybe around the world. And I like the company, but I'm not ready to step in an bullish trade yet because number one, it's been in this downtrend and then the last couple of days, actually this whole week, it had this massive sell and it got into oversold areas. The only reason why I would potentially get into a trade is just because it's so oversold, you can probably maybe try to pick a bottom. It did bounce this week, the last two days, bounced maybe a dollar, dollar and a half, which is a good thing, but Verizon has earnings coming out this week, I believe. So I'm not ready to step into a trade right before earnings because there could be something in those earnings report that justifies this, maybe, maybe not. But anyway, Verizon's something I'm looking at. I need to see how earnings turns out. Now, I did look at AT&T. So AT&T, the other largest phone carrier provider also had this move down this week as well. So there's gotta be something going on in the telecommunications industry. They, AT&T probably has earnings coming out soon too. I don't know the date for that, but keep an eye on these companies could be a good buy at some point, but not yet. The other thing I wanna talk about is the pharmaceutical companies, Bristol Myers. This is Bristol Myers, BMY. Now we sold to put options with a lot of cushion here as it was getting oversold here. The RSI got into very oversold area, which when BMY, Bristol Myers was around $60 a share. Now, even though the stock has still come off, price action is still coming off, still sort of oversold here, but you can see as the price is coming off, the RSI was not making new lows, which tends to tell me that the selling is really coming to an end, okay? The RSI is sort of starting to move up while the stock was still going down. That's divergence. That means that the selling should be coming to an end and it has rallied the last couple of days. And so we sold put options, even though the stock's coming off, our put options that we sold are working in our favor because of that time decay. We have a lot of cushion. So that's another reason why we like selling options because you don't have to be perfect on your directional assessment of the stock and you can still make money. So the pharmaceuticals, this is Merck, Merck coming down as well. This is when Merck announced that they had a pill for COVID that you can take a pill as part of the COVID vaccine in pill form. So it jumped here, but has pulled back pretty good the last two weeks or so. Johnson and Johnson, all the pharmaceuticals have had this down move. So eventually they will be a buy, not quite yet because this price action is not telling me it's time to get in. So we look at the price action. Which way is the stock trending? Why get into a bullish trade if the stock's still in a downtrend? You don't wanna do that. You don't, it's gonna just frustrate you. So let's see what other stocks we can pull up here. So we have Microsoft. So this is what I do. I have my stocks here, my watch list and I just go through the charts to see if anything jumps out at me. Nike, so we can talk about Nike. We got into a bullish put spread on Nike in our newsletters. Why? Because Nike had dropped down to the 200 day moving average, started to find some support here. The RSI was getting somewhat oversold and it bounced and it bounced and it bounced above the 20 day moving average, which is what I liked to see. And so it was time to step into a bullish trade. Nike, great company. You can't hold a great company down for long, okay? Got way oversold, found support here at 200 day and started to move up. And I decided that that was a good enough point for me to get in that Nike had some bullish momentum behind it, so we got into a bullish put option spread. What else can we see on the charts? Let's take a look, this thing keeps bouncing on me here. Amazon had a pretty good day yesterday, it was up over $100 a share, but still in the wide channel. Netflix doing very well. Netflix had been in this channel for a long time, finally broke out above it and now seems to be tracking the 20 day moving average. So when it pulls back, now it pulls back to the 20 day moving average and moves higher. So Netflix could be on this next journey now higher. It has convincingly moved outside of the channel. So Netflix looking good on that front. Let's see what other stocks that we have here that we can look at. So Oracle, we like Oracle. We have a bullish naked put sale on Oracle looking good. Oracle just keeps going up, I like that. Oh, AMD, we always like to talk about AMD. I love AMD as a company. Here's a pretty good pattern to look at. AMD just kept finding support at the $100 level. Tried to push through it a number of times, the bears could not get through 100 and it had been coiling into this tighter and tighter pattern. Had the downtrend, but then it just broke above the downtrending line, which is a very bullish scenario here. So AMD got out of its downtrend, found support here and now the only way it could go is higher. So we've got some bullish momentum behind it. I like AMD here for the long run, probably will continue on for all time new highs, I'd say in the near future, but never rule out another pullback. There's no guarantees, but AMD looks pretty strong. I found the support at 100 should probably keep going for the foreseeable future. What else do we have here? Let's take a quick look. Let's see what else we have. So we looked at the, here's Pfizer, like I said, pharmaceuticals pulling back. Twitter, okay, so I did wanna bring up Twitter. We had a trade on Twitter that worked out, we sold some puts on Twitter. Here's what I'm starting to see in Twitter. Now you can always draw your patterns. What I'm starting to see is a little bit of a congestion triangle here on Twitter. So let me edit this a little bit, make it a little bit darker so we can all see what I'm talking about. Sometimes when you do your charts, you gotta do a little manual labor, okay? So it makes things a little bit clearer. Now, this is congestion pattern, a little triangle here means things are getting tight and tight and tight. It has to blast out either upwards or downwards. I have to believe Twitter is gonna blast to the upside. Maybe earnings are coming out soon, so we need to be careful of that. But at all three moving averages, we got the 50, 20, 200 day moving average, all converging at the same time. That's pretty powerful as far as the next move is gonna be a strong move up or a strong move down. I think it's going to depend on how the earnings come out. That should be sometime, I think, Twitter by the end of October probably. So the next two weeks or so, we'll see. But this little pattern's gonna blast off one way or the other. I can't make a prediction yet, probably higher, but depends on the earnings. But whatever move ends up, it's gonna be pretty strong one way or the other. So keep an eye on Twitter. All right, I think that's really all that I wanted to show you today. I apologize that my chart keeps jumping like that. I don't really like to take a look at the meme stocks anymore. Pepsi. Let's take a look at Coca-Cola because it's such a great, great company. Coca-Cola has fallen below the 200 day moving average here for this set of days, got pretty oversold on the RSI. So it has bounced back. So Coke bouncing back, still in just a general slow, slow uptrend. Coke is a great company for their dividends. They pay a pretty good dividend. Many, many years been paying dividends. So if you like a nice, slow and steady, Coca-Cola could be your bet. It's now back up on an upswing. So Coke, long, long-term hold could be good. Let's take a quick look at Walmart. I had bought some Walmart shares on the dip here. Got very oversold on the RSI right here on this day. And it's bounced back since. So what we can draw for Walmart is you have this, you've got the uptrend and you have a little bit of a resistance right there. So I think if Walmart can get above, and you also have the 200 day and the 20 day kind of converging together. So Walmart can blast above where it's about $141 a share right now. We wanna see Walmart blast up and start to take aim at the 50 day moving average here. So Walmart seems ready to blast out between 140 and 145. So keep an eye on Walmart for next week. But it's sort of been ugly, you know, it goes up, down. It's just mostly sideways since last summer. So not a lot of price appreciation from Walmart. All you've been getting is dividends. But they pay out a dividend. But Walmart's a long-term hold. So you gotta get through some of this nastiness for a while. So keep an eye on this area here, 140 to 145 for Walmart. All right, I think that'll do it. Let's just look at the S&P 500 one more time, get a game plan for maybe next week. I like how it finished the day yesterday, finished above the 50 day moving average and looking ready to possibly make all-time new highs again. So I'm very enthusiastic about this move, the way that this week ended. And I'm hoping that the rest of the year is gonna be bullish for the market. All right, so that's it. You know, some people ask me, you know, what is this charting platform that I use? This is called eSignal. It's a charting platform. Others out there, some people like, now besides getting it through your broker, if you use Interactive Brokers or TD Ameritrade, you can use their platform for charts. Thinkorswim is part of the TD Ameritrade platform. You can go to sites like tradingview.com or Trendspider is another charting platform. These are, you can either have a free version or a paid version, the free version has delayed data. So if you want real-time data, you have to pay for it. But Tradingview and Trendspider are two other platforms that people have been likened to use. Let's quickly go to our website, smartoptionseller.com. Go to our website. If you don't know anything about putselling, wanna know about putselling, get our free putselling basics guide right here. Go to the page here, put in your name and email address. We'll send you a free copy. Also some other things that we offer our services tab right here. We have two newsletters. We have a putselling, a naked putselling newsletter and a spread putselling newsletter. We also have our coaching to help you learn a little bit more about options if you need help. All right, so that'll do it for me today. I hope this video has been helpful. Give me a thumbs up, give me a comment. Don't forget to subscribe. Hit that red subscribe button, bottom right hand corner of the video. And if you do, you could turn on your notifications and you'll never miss when I put out a new video. All right, send me an email. Let me know what you're thinking. And I will always answer your emails. All right, so 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.