 Hi everyone Lilo here from smartoptionseller.com today is Saturday, June 19th, 2021 Welcome to another Saturday edition of our YouTube videos We'd like to break these videos into two parts first part where I give you guys Some information on a great options trading strategy And then part two is what we call our Saturday synopsis where I like to go over the charts Take a look at the stock indexes Individual stocks to see where they've been and where they may be going. So thank you for joining me sit back Relax and let's jump right into it as you can see on your screen We will be talking about deep in the money call options specifically buying Deep in the money call options. It is the only option buying strategy that I Recommend in my 30 years being in this business and the book that I've written get rich with options I lay out four strategies for options trading for options trading strategies Three of which are options selling strategies one of which is an option buying Strategy and that is what we will be talking about today buying deep in the money call options. I Continue to get emails from people every week, which is great. I love getting your emails And they want to know if it if it's now the right time to buy stocks Or get bullish on stocks or get bulls on the market. Well, there's always you can get in at any time, obviously Sometimes better than others But you know if you're gonna get into the market you can get in as the market's going up or you can get in As the market's going down. It really doesn't matter if you have a long-term strategy You got to get in at some point right you got to get into the stock market at some point It's it's been the greatest wealth generator of any investment over the last 200 years or so, so My my my answer is yes, you can always get into the market if you want to try to time the market that's up to you but What we're going to talk about today is is definitely a bullish strategy Based on an options trading method and that is called buying deep in the money call option So for some of you that don't know what that is I will explain it and for others that might know what that is You know stick around because I'm gonna show you why buying deep in the money call options is a superior method To just outright buying stocks, okay? So if you're bullish on a position if you're bullish on a stock, you don't have a position yet What can you do? How do you get how do you get into that stock with a bullish position? Well number one is what most people would do is that they buy shares of stock Which is a great way to get get into the stock and depending on your wallet and how much money you How much money you have to put into the investment will decide how many shares of stock you can buy But as an alternative right here at the top line buying deep in the money calls is Is an amazing alternative to buying the stocks But just remember this is a bullish bullish strategy So if you're not bullish, you don't want to be buying stock, you know, and you don't want to be buying call options Okay, so let's get this out there right up front Buying deep in the money call options is a very bullish strategy just as buying stock is okay And the thing we have to do is we have to compare this strategy to What it would cost to buy a hundred shares of stock because each option contract consists of a hundred shares of stock If you exercise that call option So we have to always compare to what buying a hundred shares of stock would would cost Okay, so let's just get that out there right up front buying deep in the money calls is an option trading strategy and it mimics Buying the stock but there's huge benefits to buying the call options instead and we're going to talk about that right here the first big Benefit of buying call options versus buying the stock is that the call options cost a lot less There's less cost less upfront cost when you buy call options. Okay, so that's number one number two There's less downside risk when you buy call options versus buying stock And number three right here is you have you get a greater return On your capital a much better return on investment ROI these three things right here these first three right here is the main Reasons why you would want to buy deep in the money call options versus buying stock Less cost less downside risk and greater return on your capital I'm going to show you an example of why that is my intention here is to Make or to help all of you become Deep in the money call option buyers Instead of stock buyers after you see these examples. I hope to convert you all over to Call option buyers instead of stock buyers Now we also the way I like to look at this strategy is that it's a it's a longer term buy and hold Strategy most people will buy stocks who are looking for that long term appreciation You hold on to those stocks for a while Same thing you can do with these deep in the money call options Now call options or all options have expiration dates that can go out almost three years in time So you can choose any length you want for me what I consider a longer term trade is at least six months six months to a year Okay, you want to hold on to this thing. You want to give yourself some time to be right If you if you're bullish on a stock On a day to day basis the stock could be very erratic, but over the long run if the stock You know follows its its earnings if it has good earnings and good profits and good sales The stock price will follow that to the upside over time So you want to give yourself time to be correct, right? If you buy a stock and one day and you sell it to next It's just a crapshoot. So you want to give yourself time to be correct Okay, so I consider that you know at least six months to a year out in time And and the key to the deep in the money call option strategy is picking it an option strike price With a high delta now just remember all options have different strike prices all options have different expiration dates And all options have a different delta. What is a delta? The delta is well, there's a couple definitions of delta every option has a delta you can get delta Um information from your option chain that you have at your at your broker's trading platform Okay, but the the easiest term to understand about delta The delta tells you how much that option price will change in conjunction when the stock price changes Okay, so if the stock goes up Obviously you want your call option value to go up as well You know the reason why you buy stock is because you want the stock to go up It's the same thing when you buy call options you buy that call option at a price You want that price to go up. So eventually maybe you can sell it for a profit, right? So if the delta tells you how much the stock price will change when the stock price changes You want a high correlation, right? If the stock moves you want that call option to move The delta tells you how much the that the option price will move Deltas range from zero to a hundred. It's actually zero percent to a hundred percent So choosing an option with a very high delta in my assessment a delta of 90 percent Is what we'd be shooting for so that means the option price is going to move 90 percent of whatever the stock price moves Higher or lower you have to understand if the stock price drops the call option price will drop as well So remember this is a very bullish strategy. So if the stock goes up, it's good the stock goes down You know, it's not so good but anyway The reasons why is that you'll have the less cost less downside risk and greater return on capital So the delta we're talking about is you want a high delta because you want this option price to move when the stock price does And I'll show you all this in the example Now when you get to the expiration Of the option because all options have an expiration you'll have to you'll have to do something You're going to have to make a choice and that you have three choices at expiration You can either sell your call option back to the market for whatever it's worth at that time It could end up being a gain or a loss depending on where the stock moves over that period of time You can exercise that call option if it's still in the money and turn that call option into actual shares of stock Or you can roll the option Which means what you do is you'll you'll get out of the call option Meaning you'll sell that call option back to the market and you'll buy a new Deep in the money call option at a longer term expiration date. So you're in the trade all the time So at expiration you have to come up with a you have a choice to make now Like I said, you can sell it and you'll get whatever money that option is worth at that time And you'll have to figure out what if you if you made a profit or a loss You know because the option price is always going to be determined where that stock price is at expiration Now if you exercise it you're going to turn that call option into actual shares of stock And you'll have to pay for the balance of the the stock at that time And I'll show you what that means or you can roll it where you're just Selling the first option out and you're buying a new one and you can stay in the trade for another six months Or another year out in time. So you can continuously roll this thing for years and years on it And by doing so that'll keep your costs very low Now the the the drawbacks here are Down here. Obviously you can lose money if the stock drops Okay, that's no different than if you just bought the stock itself and the stock dropped you're going to lose money Okay, so that's a drawback to any bullish strategy is that you can lose money. That's just part of investing And the other thing about the other downside that some might see is that when you buy call options You don't receive any dividends That the company pays out to the shareholders because you're not a shareholder You're a call option buyer So you don't get any dividends and you don't receive any voting rights You can't vote your shares at the annual meeting of shareholders And what I say here is does that even matter does that matter? It doesn't matter to me because the benefits of these things right here less costs Let's less downside risk and greater return on capital. I think overpowers This drawback of no dividends or voting rights, but you know, that's up to you to decide so Let's just go over this one more time because I'm laying the groundwork here for converting you into call option buyers instead of stock share buyers The deep in the money call option is is an alternative an amazing alternative to buying shares outright And the reasons why right here these three reasons why Okay, so I'm going to show you an example of how it works And why it works and why you may want to buy deep in the money call options the next time you're thinking of buying At least 100 shares of stock. So let's take a quick look at Let's go to our option chain here And we're going to look at AMD Advanced micro devices actually let's bring up the chart first And so here's advanced micro devices in a little bit later when we do our Saturday synopsis We're going to look at the the stock chart a little bit deeper But AMD advanced micro devices. Let's just say you're bullish on AMD And you want to buy some shares of stock, but you're you're you're you're going to listen to me and you're going to potentially buy a deep in the money call option now AMD finished at $84.65 yesterday Friday, uh, June 18th, 2021 So we're going to use $84.65 as our price of AMD right then and there and If you wanted to buy shares of AMD 100 shares, you'd have to pay $84.65 per share And i'm going to show you why buying a deep in the money call option instead Is a much superior trade to buying the shares outright. So let's go into our option chain here This is an option chain for AMD We got call options on the left put options on the right And we're going to choose an option Strike price with at least a 90 percent delta now over here in the call option chain. We have the bid ask prices for each call option Um, and then we have the the greeks. These are the greeks the delta gamma vega theta All we have to worry about right now is the delta column. So if you have an option chain at your option broker Make sure you have the delta column Installed in your option chain here are the strike prices. Okay, as you know, all options have different strike prices But we're going to choose an option strike with it with a 90 delta at least Okay, so what you do is you scan down the strike prices and you scan over to the delta column until you As you move up as the strike prices get higher the deltas get smaller. So we're going to look for Okay, so here's our delta of 91.911. So that's 91.1 percent delta And we see that it's the 60 dollar strike price 60 dollar calls. Okay, so we've we've we've keyed in on the 60 strike because it has a 91 delta So instead of buying 100 shares of amd At $84.65 which would cost you $8,465 We're going to buy this $60 call option And here's where it went out yesterday 24 20 bid at 27 50 offer So we always try to do something right in between the bid ask as our fair value Whenever you're buying or selling options doesn't matter what it is And even in a different example than this you got put options over here You always want to trade something in between the bid and ask because that's where the fair value would be Okay, so for our $60 call option $26 per contract is what Fair value would be it's it's somewhere in between These two bid and ask prices. So we're going to use $26 per contract and to figure out the actual Amount in actual dollars. You have to multiply these numbers By 100 Because there's a hundred shares in each option contract. It's the option multiplier So $26 per contract times 100 is $2,600 So let me bring up my little Spreadsheet here and I'm going to go over the example of why Buying a deep in the money call option is so superior to buying 100 shares of stock Now in this example, we're comparing buying 100 shares of amd At $84.65 Compared to buying the $60 call option now as I let me go back to the option chain real quick We're looking at the december 17th 2021 options 181 days in the future. So that's about a six month option Okay, you can choose any expiration date you want But as we're using longer term trades, we want to go at least six months into the future That is the december 2021. It's not it's not a hard and fast rule It's just whatever you choose but in for this example. This is example only not a live recommendation We're going out to a six month trade. So let's take a look at our Our spreadsheet here now some of the the numbers here the stock price is $84.65 And the the option cost is $26 per contract So we're going to use this little legend here to help us understand what we're doing Okay, now one important thing you have to understand is where is the break even on the option purchase compared to the stock price You always need to know what your your call option Break even prices. Okay How do you figure that out? Well right here ditm stands for deep in the money Deep in the money break even is $86 per share How do I come up with $86? Well, you have the strike price of 60 Plus the option cost, which is $26, right? $26 plus 60 Equals $86. Okay, so you always want to know where your break even is compared to the stock price So the stock price is $84.65 The call option break even is $86 So that's pretty close pretty close by buying the call option. You're gonna have a break even price What do I mean by break even? Well as soon as amd stock itself gets above $86 a share You're you're making money Okay, it's a little higher than the current stock price But not much higher. It's $1.35 higher So all amd has to do in the next six months is move up $1.35 per share and your break even Okay So you need to know you have the stock current stock price and you want to know what the the call option break even is The deep in the money call option cost as we know is $2,600 if you buy that call option It will cost you $2,600 that you have to pay right up front. Your broker will debit your account $2,600 If you were to buy 100 shares of amd outright, it would cost $8,465 So right then in there, you're saving $5,865 Right off the bat. You're getting a savings of $5,865. And what does that mean? Well, that means you have $5,865 less risk Because if amd craps out and drops to zero dollars per share You're only going to lose $2,600 where everyone else will lose $8,465 So you have a huge downside Cushion dollar-wise compared to buying the shares of stock itself Okay, so you have 69 percent less risk less capital on the line compared to buying 100 shares of stock And i'm going to show you the numbers here the percentage return Is always triple 300 percent more Than any return you'll get on the stock purchase. Okay, so now let's let's take a look at the numbers here In this little example, I have different levels of the stock price Okay, here's the stock different levels of stock price And i'll show you how much you can make or lose On the stock and the stock return and over here is i'll show you what you can make or lose On buying the call option and its return on investment So at zero dollars per share if amd craps out and drops to zero Everyone's going to lose 100 of their investment But the key is We'll look at the dollar amounts with the option you'll lose $2,600 the stock They'll lose $8,465. Okay, that's your your five over $5,800 savings right there on the downside The stock drops to $25 You're still only losing $2,600 And stock buyers are losing almost $6,000. So you're still doing better at $50 a share You're you're still losing $2,600 You're going to lose the maximum on the call option if the stock finishes below the strike price Okay, so at $50 you're still losing $2,600 that's 100% of the investment But the stock buyers are still losing more on a dollar basis The return for the stock buyers minus 41% We're at minus 100% but you got to look at the actual absolute dollar numbers You're still losing less than the stock buyers, which is which is a big deal So now let's move on to the breakeven prices the stock current stock price is $84,65 Stock buyers have zero dollar returns zero percentage return on the deep in the money call option You're losing $135 And you're losing 1.6 percent Okay, the stock price breakeven and the call option breakeven are very close to each other Okay, that's what you want. You want to try to get that breakeven pretty close to the current stock price You won't you'll never get it there, but the smaller the difference the better Now at $86 you see here's the breakeven on the call option And the call the the stock buyers are making a little bit amount of money But here's where it gets great on the upside at $100 a share The stock buyers are making $1,535 the call buyers are making $1,400 But here's the this is where the return gets nice and juicy The stock buyers have an 18% return Call option buyers have a 54% return on your money. Why is that? Because you're putting up so much less money Uh to get into the trade so anything that you make is going to be magnified three times greater Three times greater than than the stock purchase return on investment. Okay at $150 a share You're making $6,400 for the call The call the stock buyers are making 6535 the call the the stock buyers are always going to make a little bit more on the upside Dollar wise just a little bit more But look at the returns 77 compared to 246 return And at $200 a share you're making 11,400 compared to 11,535 136 return 438 return always more than triple At least triple the returns by buying the call options And the dollar Gains are going to be very very similar On each one. So it's the returns on the upside are triple on the downside the dollar amounts are are less So you're you're you're winning in all in all cases on the upside and the downside I mean no one likes to lose money, but losing a lot less money Is better Okay, so that's the thing Now you're always going to compare the the profit or loss based on What the option cost? Okay, remember the option cost $2,600 And at these prices That's where the the here's where the returns are how much money you can make Okay Now sometimes these numbers can confuse some people So I want to actually show you how to calculate the the values here So let's just say AMD gets up to 200 dollars a share So you have to subtract out the you have to subtract out the the The strike price first so 200 i'm just doing on my calculator to make sure i'm doing it right at the same time So 200 Minus the 60 60 dollars is the strike price is 140 Okay, but you have to subtract out the option cost, which is 26. So minus 26 Is 114 Times a hundred dollars because a hundred multiplier. So that's where you come up with your 11,400 dollars return, okay That's that's how you do it 200 minus 60, which is the strike price minus out 26 26 dollars per contract that'll get you the P&L any times that by 100. Okay, so that's how you figure out the numbers. So clearly we can see Up and down the stock price level You're doing just as good dollar wise Triple the returns on the downside You're losing less than the stock buyers and Although the return this is this should be minus 100 forgot to do that there. This is all negative 100 But the dollar amounts are less So you're getting better on the upside and you're losing less on the downside. So here's the just remember this Your savings almost 5900 dollars Your returns are triple And you're less downside risk 69 percent down less downside risk So the benefits of buying the deep in the money call option Totally outweigh the benefits of buying shares of stock now in this case The option costs 2600 dollars if you bought 100 shares, it would be 84 65. Okay, so you always want to look at these numbers Now if you don't have 2600 dollars in your account and you can't you just can't buy That deep in the money call options because you don't have 2600 dollars That's fine. You know, that's that's going to be up to you to decide how much money you have to play with Now if you still want to get long or bullish on the stock Well, then you just buy a couple shares of stock AMD You know, whatever your wallet can afford if you can only buy 10 shares of stock At at this eight price at this 84 dollar price. That'll cost you 840 dollars in change You know, if that's all you have well, then you just buy some shares of stock But in order to buy this deep in the money call option You have to have at least 2600 dollars in your account now You can go back to the option chain and let me move myself over here a little bit You can look at different strike prices if you have, you know, a thousand dollars to spend on a call option Well, then you could look at maybe the 82 and a half or 85 call strike and here's the prices, you know, this would be You know, 950 dollars maybe but remember the delta That's about a 55 delta. What does that mean? Well, if the stock goes up $10 the option price is going to match it by about 55 percent So your option price will go up, you know, five dollars a little more than five dollars If the stock price goes up ten dollars Is that enough bang for your buck? You know, it's a 50 percent You're getting the option price is going to track that by 55 percent You know, for some people, that's fine. It's a lot less money It's 950 dollars versus what we're buying at 2600 dollars So you have to decide based on your wallet, you know, how much money you have to spend How much bang you're looking to get for your buck? It's up to you now if you bought this if you bought the 85 call option for 950 dollars Well, 950 dollars is a lot less than, you know, 8465 dollars. You have a You know a huge difference, but you're only getting 55 percent of the move just remember If you're buying call options, you want that option price to move and you want it to move a lot But the only way it's going to move a lot is if you choose a high delta In my opinion, 90 percent delta is high enough Okay, people say, well, why don't you, you know, people say, well, why don't you just buy the Um, you know the 37 and a half calls has a 99 percent delta But its cost would be close to 4700 dollars Okay, here's a bit ass midpoints about 4750 4750 dollars Versus 2600 dollars versus, you know, 950 dollars for different strike price levels different deltas So you have to decide Okay, you have to decide what works best for you my My Goals are 90 percent delta six months out in time and whatever the option cost You know, you have to pay it or you know, if you can afford it. All right. So that's your lesson. Let me bring up the document again I'll move myself back over here Here's the deep in the money call my assessment why I love it versus buying stock So consider the strategy You know, it's a it's a much better way to use your available capital All right, so we're going to move on to part two of our videos Which is our saturday synopsis where we take a look at the charts, but before we do that I want to just bring up my website here Let it get everyone familiar with what we're doing here smart option seller website smart option seller dot com We're all about selling put options selling put option spreads. That's our bread and butter Although we're talking about deep in the money call options. We're option sellers first and foremost So if you've never heard about selling put options get our free put selling basics guide It's an e-book go to our website put selling basics guide here Put in your name and email address will send you a free copy Okay, put selling is what we like to do and for those of you looking a little bit more We have a few services. We have we run a couple newsletters. We sell put options We sell put option spreads. These are our two different newsletters Just click on them and we also have our one-on-one coaching where we teach people how to trade options We've been very successful with that. Okay, so that's our our website. Let's move on to our saturday synopsis Let's take a look at some charts and see what we can do here And we're going to Move the give me a second here to resize the chart a little bit Okay, here we go. So we want to look at some individual stocks. We always take a look at the s and p 500 first As represented by the sp y which is the exchange traded fund for the s and p 500 It's it's a an easy way an easy investment to get into the the market as a whole if you want to Exposure to the s and p 500 you can buy the sp y What we do is we look at the charts see what's been going on and we look for patterns We follow the the trend lines We follow support and resistance and we try to draw some patterns to get a gauge of where the market might move to next Now if you've been following us for a while, we keep some of these older patterns on the page just to see how they've turned out I have my blue 20 days simple moving average my red 50 days simple moving average the green or orange 200 days simple moving average down here is the 14 day rsi Which is an overbought oversold indicator. My levels are 80 Excuse me 80 on the upside 20 on the downside 80 20 Okay, so this is the sp 500 The market was looking pretty good We had been had this ascending triangle On here, which we drew recently meaning that the market was looking to Move higher blast above the resistance line but the market had a different Different idea this past week, especially yesterday friday had a pretty big down move in the market But that's some getting some rotation between the s and p and dow and the nasdaq stocks So we'll bring up some nasdaq stocks and we'll see what happened here So the sp 500 got above the resistance line for a couple days here, but the the latter half of last week Got knocked back down and has moved now below the triangle And has moved below the 50 day moving average. So I'm not concerned about it not concerned about it yet The reasoning why for the for the down move the last couple days It all comes down to the inflation and interest rate narrative that's happening here in the us The us federal reserve had a meeting on wednesday this last week and they They have been holding interest rates down for a very long time now, especially since the pandemic last year And they're now thinking that they may have to raise interest rates a little bit sooner Then they thought From their last, you know, big meeting in march The reasoning why because inflation started to kick in the economies are are roaring back people are flush with cash And we've had a lot of disruptions for the supply of everything everything in price is going up Everything that you buy has been going up in price. So then inflation is starting to heat up and the way that the the federal reserve Tries to combat that inflation is that they have to raise interest rates. Okay So when interest rates rise Stocks typically will sell off. Why because now fixed in some fixed income securities Are more competitive So people might pull their money out of stocks And put put them into fixed income securities So if they pull money out of stocks, that means stocks are going to sell off and maybe drop I don't buy into that so much Because the interest rate rises are still very far away Maybe towards the end of 2022 like a year and a half from now So people have a knee jerk knee jerk reaction to the narrative like that But you have to remember You're not going to get a lot of money or return on your money by investing in fixed income securities, right? Where are you going to put your money you're going to park your money in treasuries for 30 years and get What is it 2 3 percent? I don't even know but I know it's not a lot Versus stocks which historically can return 7 to 10 per year just by investing in an s&p 500 index fund So people are not going to pull all their money out of stocks And invest in income fixed income securities. It's just not going to happen But we get this knee jerk reaction and people will sell stocks because they're scared of interest rates rising Interest rates are going to rise. Yes down the road, but they're not going to They're so low to begin with interest rates that it's not going to be enough to jolt everybody out of their their stock positions and the other thing is that The reason why stock prices go up is because these are Profitable companies these companies are making products that people buy So their sales and revenue numbers are going up and when a company is profitable over time That means their stock prices go over go up over time So are you telling me that even with a stock even with a company being profitable People are going to just sell out of all their shares of stock just because interest rates are going up Absolutely not. So the stock market goes up over time. That's how it works The stock market is made up of actual companies that create actual products that people actually buy That causes companies to have increasing sales over time. So the stock prices rise Sure, interest rates may go up and stock prices may ebb and flow and come off But over the long run, they'll continue to go up They go up whether interest rates rises or not. It's how that's how the stock market works. Let's look at the monthly Okay, so here's the s&p 500 going all the way back to early 1990s Goes up goes down goes up goes down and then it just goes up the stock market goes up over time Regardless of what's happening around the world world wars pandemics terrorist attacks the market will always find its way to go higher because it's It's made up of profitable companies. So the narrative about interest rates rising and inflation In the short term knee jerk reaction, but in the long run it will go up. So Try not to get scared out of your positions, you know, if you're trading if you're day trading or swing trading Prices are too erratic in the short term, but over the long run They will go up. So you have to have a long term mentality. Okay, so On a short term the market has sold off this week Yes, and it has fallen below the ascending triangle that we've drawn here and it's fallen below the 20 day and 50 day moving average So what does that mean? Does that mean this is the end of the bull run and now a new bear market is upon us? I don't believe so, but but stock prices sell off The last time the s&p 500 of the sp. I sold off was back here in early may You know a little over a month ago And look what it did it bounced off the You know the the 50 day moving average and went back up where we are here We're still higher than where we are were a month ago But people get scared people get scared out of positions You know do what you will Um, yes the market on a short term basis has fallen below some some support areas Does that mean it's just going to keep falling forever and never come back? Of course not. So you have to temper your mentality temper your psychology to know Yes, the market's selling off, but it will go back up again Uh at some point now if you if you have very short term trades You know then this might be a concern for you But if you have a longer term mentality, it's just another blip on the screen Okay, what did people think when? What did people think when the market sold off here where they scared out maybe but it bounced What did people think when it sold off here? Did they get scared out? Maybe but it bounced So you have to look at the trajectory goes up Falls off goes up falls up goes up falls off goes up falls off But the longer term trajectory is to the upside So you have to have some patience you have to have some emotional fortitude And stick with a longer term mentality. Okay, so s and p 500 still going up still has a long term up move Yes, has a pullback, but i'm not too concerned about it You know the only thing that's going to really knock this back down is some other major catastrophe that we that is unforeseen right now But you have to follow what the market is telling you. Okay, so that's the s and p 500. Let's take a look at The dowel and the nest so let's look at the dowel because the dowel got hit pretty good this week It it was the laggard of the three indexes so there here's the dowel industrial Has sort of been flat lining and then it came off towards the end of this week here Let me open this up. You can see this good little waterfall moved to the down It went below the 20 day went below the 50 day. That's a pretty good move for the dowel If you look at the rsi It's getting it's come off pretty good So it's starting to get down to some oversold levels when it hits oversold It doesn't necessarily mean it's going to bounce back right then and there But it just means that the the selling should start to slow down This is a pretty sizable move for the dow over a week week and a half And that's why the rsi is getting closer to some oversold levels So eventually it'll find its footing and then it'll start to go back up again So the dowel was hit more than than the nasaq and the s&p 500 But that's due to rotation people were selling the dowel stocks to buy nasdaq So let's take a look at the nasdaq here And i'll show you why the nasdaq was really strong this week Now we recently drew this w pattern, which is typically a bullish pattern once it gets above the resistance line It has not done that yet Okay, here's the resistance line But the the nasdaq really didn't sell off that much this week compared to the the dowel and s&p 500 just kind of meandered for five days Right and when we get into some of the individual stocks, you'll see why so the nasdaq still wants to get above this resistance line It's it's above the 20 day and 50 day moving average, which is good So the nasdaq stocks have been strong. Let's take a look at some individual stocks And i'll show you why the nasdaq has been strong. Let's look at amazon first amazon had a pretty monster week You would think that everything was selling off, but no not amazon. Look at this nice Look at this big up move that amazon had over the last two weeks or so Is it's above all the three major moving averages, but but it's getting close to this long term channel resistance Okay, amazon's been in this this channel for you know about a year now Has not been able to bust above or bust below So it's making the move back up to the resistance. Will it get through it this time or will it get knocked back down? That's yet to be seen Yet to be seen, but when it gets through that should be the catalyst to keep everything rolling to the upside Let's take a look at apple You know, I talk about apple all the time because i'm long apple apple finally had a decent move this week Okay, last couple weeks actually here's this here's apple's move the last few weeks Finally has gotten above both the 50 day and the 20 day. It's still above the 200 day It made this triple bottom here off the 200 day moving average one two three triple bottoms are are usually a reliable symbol A reliable indicator that if it can hold on the on the triple moves It'll it should go up again and especially on the 200 day moving average and look where it's gone It's gone up nicely from about 123 dollars a share up to you know 132 this week So how nice move it's it's it's looking better for apple. I hope the the move up continues. Let's look at um tesla tesla here, let's blow this out a little open it up tesla, um, you know, here's the 200 day moving average. Let me take this this triangle out of here see it a little better tesla's been hugging along the 200 day moving average and here's the 20 day moving average Had a pretty good move this week stayed above the 200 day. So this is a little constructive here um, you know, it's gotten away from the support down around 550 and and is around six low 620s right now so, uh tesla Has had a little bit of an up move over the last two weeks or so so that's constructive I know there's a lot of bullish tesla players out there. So let's see what it can do next week Uh, let's take a look at some other charts see what happened on some of these this week What do we like to look at? um We'd like to look at well amd we can go back and look at amd amd had a pretty pretty nice move the last two days Rallied four or five dollars on thursday and friday it it remained on those highs So amd has gone from the bottom of this channel and has moved back up Um, let's take this line off of here So amd, um Looks like it wants to start moving higher again. It's above the moving averages, which is good And i'll blow this up a little it's above the 200 day 20 day and 50 day had a nice strong power move this Thursday and friday So let's see if amd could keep the momentum higher and start to get back Moving towards all all time new highs again. Uh, what else we got? What other? Stocks that we want to look at um Netflix anything going on with netflix netflix is still stuck on the channel Well, let's take a look at cisco and oracle two stocks. I think I highlighted last week Cisco was making the ascending triangle Okay, typically when it blasts through the ascending triangle when it blasts through the resistance It should keep going which it did a couple days of a movement above the Resistance line, but like with everything else is so we could get knocked back down. It had it's fallen through the triangle Falling down below the close below the 50 day moving average Is that enough to say the bull market's over for cisco? I don't know. I don't think so We can draw we can draw a support line here. We can You know attach some of these lines You know give us another another support layer. See if it will fall below this line But cisco's in a nice upward trajectory um You know stocks move up and down. That's all I can say and um, you know, unless there's some major catalyst to really say You know, it's cisco's days are over. They're going out of business which hasn't happened You know, this is a temporary pullback and over time it just should keep going up Let's take a look at oracle Same thing with oracle. We had the ascending triangle With the flat top here's you know, it had a nice support ascending support Blasted well above the the triangle But just came off this week just like everything else. So it's falling below the moving averages falling outside of the triangle Uh, well, what do we think? Well once again, we can also draw Uh, you know trend line here depends on how far back you want to draw the trend lines You can use these lines here That goes like that or you can go up this way so You know oracle has some support oracle actually did Now that I think about it it had earnings this week, right? And the numbers were good But for whatever reason the market knocked it down We actually took a position We're put option sellers So we sold some put options on oracle after the drop one of the things we'd like to do is if a if a quality stock Has a big down move due to a maybe a one-off earnings announcement We'll step in so we sold some put options. We sold some put options, but we use strike prices Um Way down here oracle way down here strike prices. We have a lot of buffer for movement You know, we sell out of the money put options. So we have a lot of buffer down here And so that works for us, uh, you know oracle what we'll go it will go back up over time This is just normal gyrations So that's you know, that's just you have to look at what the the price action is telling you Okay, so let's see what else we can take a look at Move this up here Oops Do this move this Okay, we've got to adjust this What other stocks do we have to look at um Procter and Gamble Procter and Gamble still in kind of a channel here Walmart took it to the downside a little bit this week Walmart getting hit Um Yeah, you know Walmart's uh, uh, you know a stalwart If you have thoughts about getting bullish on Walmart, I don't know. Maybe you wait for the for it to find its footing RSI is coming down. I have no position in Walmart. Nothing going on for me right now I I don't really have much to say about Walmart merc Some of the healthcare stocks Merc has been moving up nice. He's got above the 200-day moving average So you want to follow the the price want to follow the price action and see what's happening Let me see if there's any other any other stocks we like to look at here Oh, let's take a look at McDonald's anything at McDonald's nothing there Pepsi Anything on Pepsi? Oh Pepsi was making another was also making a triangle pattern It's falling down below it sitting on the 50-day moving average So you want to watch the price patterns? What else do we like? Do we want to look at gamestop always look at gamestop some of the meme stocks Gamestop let's look at amc real quick and we'll call it a day AMC still going up still going up there It's incredible some of these meme stocks and let's look at the bitcoin stocks riot riot is It has it bounced nicely off the 200-day moving average has this little up move, but it's hitting resistance on the 50-day moving average the downtrend moving 50-day moving average So you have to follow bitcoin the price of bitcoin has come off a little bit as well All right, so there you go. Let's wrap up here. Let's take a look at the SPY one more time We'll call it a day Market the overall market is still in an uptrend still in an uptrend. Yes had a little pullback this week Want to see what happens over the next couple days if it finds its footing and starts to move back higher So follow the price action stay long term and think about those deep in the money call options that we Looked at earlier. All right. Well, that's it for me today I want to wish all the fathers out there happy father's day tomorrow Sunday June 20th 2021 don't forget to tell your dad jokes everyone loves those dad jokes one of my one of my favorites is that You know, I didn't like my beard at first, but then it grew on me, but I'm bump get it Literally grew on me. 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 lull signing off