 Good morning, everybody. Lee Lowell here, smartoptionsower.com. Today is Saturday, March 6, 2021. Hi, here I am down here. How's everyone doing today? Hey, listen, today we're going to talk about what to do in a down market sell-off if you have sold short naked put options. Got questions this week, emails asking about how to repair, fix. What do I do if I've sold a naked put option? What's happening now? You know, the market's selling off, the put options going up in value. I'm not sure what to do. Help me out. Give me some suggestions. What should I do? So today we're going to talk about how to either repair, fix, hold, whatever. What to do in the scenario where the stock market goes down, which we haven't seen in a while, and this week we had a down market. So people that have sold naked put options are sort of getting into a little bit of a tizzy because the market's moving against them. So let's talk about what to do and how to do it when you have sold a naked put option and the market sells off. And that's what will be the topic for today. And then after that, obviously we will do our Saturday synopsis. I'll take a look at the stock charts, the indexes, see what happened over this past week. And we know if you do follow the markets, you know, we had a pretty good down week, so we will take a look at that. So let's jump right in and take a look at what to do if you sold a naked put option in a down trending market. So let's open up the charts here and just take a quick look at let's take a look at the NASDAQ real quick because that hit hit the brunt of the selling this week. So obviously you can see we've had a good move down here. Let's stretch this out a little bit. So the last couple days this week, Wednesday, Thursday, Friday, we had these three bars. These are daily bars each day's one day's worth each bar is one day's worth of trading. So obviously we've had a good down move this week and people have been selling put options, which were great in a neutral to bullish market. As you know, since the pandemic last March, we had nothing but up. Okay. And in an up market, selling put options is a great strategy because as market moves up, put option values go down. And that's what you want when you sell a put option. You want the value of that put option to go down so you can buy it back at a cheaper price. For those of you that really aren't familiar with selling naked put options. It's a strategy that will work in an uptrending and neutral market. Why is that? Because as an option seller, each day that passes, that option value goes down in price. And if you've sold something at a high price, your goal is to buy it back at a low price. That's what you do sell high then buy low in that order. And when you sell a put option, that's what you're doing. You're selling it high market goes up. And then you buy that put option back cheaper because as the market goes up put option values go down. So that's what we want to establish right off the bat. But if the stock market goes down put option values go up. So if you've sold a put option here and then the market tanks that put option values now up here, meaning you're holding something with a paper loss at the moment. So that's why people are getting upset this past week because the value of the put options that they've sold have gone up in value. So they're not sure do I buy it back and lock in a loss or how can I fix it? What do I do? So let's take a step back here and understand what put option selling is all about. When you sell a put option, there's two things that you're doing it for. It's number one, to collect the cash. When you sell a put option, you're collecting money from the put option buyer. Number one, but you have to understand and realize why are you actually selling the put option in the first place? And your reasoning should be is because you want to gain the opportunity to buy that stock cheaper than where it currently is. When you sell a put option contract, you are obligating yourself to buy that specific stock, potentially buy that specific stock at the strike price by the expiration date. Only if the stock drops to the strike price level. So let's take a look at, let's use Apple as an example. And I'll run through some scenarios on how you can repair, fix, replace a naked put option that you sold that you now are worried about. So let's take Apple here and let's, you know, Apple's been moving up nicely since last March, about a year ago. It topped out about $145 a share towards the end of January. Now it's down to, you know, one low 120s. So Apple's hit an all-time high. It's come back. So let's just say somewhere along the recent path, you know, Apple's at $130 and you want to sell a put option. You actually have sold a put option on Apple for, let's say, the $120 strike. When it was up at $140, you're thinking, wow, you know what? I'd like to buy Apple for $120 a share potentially. It's trading at $140. How can I potentially buy Apple for $120? That's a $20 discount. Well, you could have or you probably did sell an Apple $120 put option. And when you sold that $120 put option, you're basically putting yourself on the hook to potentially buy Apple for $120 a share. And the only way that contract would come to fruition is if Apple actually fell below $120, then you would be forced to buy the shares at $120. Now, if Apple's trading all the way down at $100, you would still have to buy those shares at $120. So you'd be looking at a $20 loss at that point. Now, when Apple was trading at $145, you thought, hey, it'd be a pretty good idea to buy Apple for $120 because it's up at $145. Sure, I'd like to buy it at $120, but now if Apple's trading down to $100, maybe you're not so happy buying it at $120 anymore. So that's the risk. That's what happens when you sell a put option. You're potentially obligating yourself to buy the stock at whatever strike price you've sold. And the risk, of course, is that the stock keeps dropping. That's the same risk that anybody has if they bought stock is that the stock keeps going down. So there's no free lunch here. Even though you're getting paid money to do this trade, the stock can still drop on you. That's the ultimate risk. But anyway, so let's just say you've sold a put option on Apple because you really want to potentially buy Apple. That's your thing. You want to be long shares of Apple. You didn't want to buy it at $145, so you decided, OK, I'm going to sell $120 put option. I'll give myself a $25 discount from its current price. And so you sold the put option and you got some cash for it. Well, now that Apple's trading near $120, the value of that put option that you've sold has gone up in value. So you're not sure what to do. So let's take a quick look at my cheat sheet here and we can discuss what are your choices? What are your options for repairing, fixing, replacing, whatever you want to call a naked put option that you've sold? So there's a few things that you can do. Number one, you really have to make sure, do you still like the stock? Do you still want that stock? My rule is whenever I teach people how to sell options, put options. The thing is I tell them you have to make sure that this is a stock that you would potentially like to own sometime in the future because you never know. You may get assigned the shares and you have to buy the stock. You get assigned on the put option and you have to buy the stock. So your number one rule is you make sure you sell put options only on stocks that you'd be comfortable owning. You don't want to sell put options just to collect the income on random stocks that you know nothing about because before you know it, the stock is tanked. You'd have to buy the shares of a stock that you don't even know anything about. So that's not the way that we would want to do it. Yes, collecting the cash by selling put options is a great income generator, but you have to be very selective. You have to choose stocks that you know something about that are quality stocks and that if it comes down to you having to buy the shares, you're okay buying the shares. So you can hold for the long haul and hopefully the stock will go back up in price. But anyway, so that's your first rule. Do you still want or like the stock? If you do still like the stock, then your first choice is you can hold the trade. You sold a put option and you can hold out. Let's go back to our Apple chart here. Stock was at $145. You sold $120 put. Apple's still at $121. You know, who's to say that Apple's still going to keep going down? Apple could rally back up and your put option could go back down in value and you could end up with a profitable trade. If Apple finishes below $120 at expiration, are you still good buying Apple at $120? That's up to you. You have to decide where is your threshold? What's your pain point? Because if Apple keeps dropping, let's say to $120, $100, you still have to buy it for $120 a share. Are you comfortable holding on to a $20 paper loss at that moment in time? Any stock could go down. You could have just bought the shares of Apple and the stock has gone down and you'd be holding a paper loss. It's no different when you sell a put option. You have to decide, okay, do I still like the stock and am I okay buying it at the current price at $120, which is my strike price? If you're not okay with that, then let's look at what else we can do. The second thing you can do is you can turn the trade into a credit spread. By doing that, you would buy another put option on Apple at a lower strike price than the one that you've sold to turn it into a spread. By doing that, that will completely cap your risk. When you sell a naked put option, your risk is all the way to the stock dropping to zero. Apple could fall all the way to zero. You'd still have to buy it for $120 a share. So you have $120 per share of risk with selling a naked put. But you can repair that or replace it by turning it into a credit spread. So you've sold the 120 put. You can look to buy the 100 put at that point. You'd have a $20 maximum risk. You got the 120 that you sold and you buy the 100 put. That's a $20 cap on your risk, $20 per share. So you can always do that. And the thing is you'd want to try to keep that spread to an overall credit. Let's just say let's go to our option chain here in Interactive Brokers. And let's make sure we've got Apple here. Okay, so we've got the Apple chain. Here's the put options here. Let's just say we're looking at April 2021 put options. And let's just say you sold, let's take a look here. Let's say you sold the 110 puts for $3 per contract when Apple was still on its high. So it's currently worth about $2 per contract. Let's just say you sold it for $3 per contract before the drop. But now it's worth $2. You've got a little bit of a gain built up. You don't want to get out of the trade yet, but you're worried that Apple could keep falling. Well, if you want, you can go down and buy a $100 put option for about $0.85 a contract. Okay, by doing that, so you sold the 110 put for $3, now you're buying the 100 put for $0.85. So that's, you've got a $2.15 credit still built into the trade. You sold something for $3, you're buying something else for $0.85. So that's $2.15 credit that you still hold in the trade. But now you've capped your risk to $10 per share. So you sold the 110 puts, you've bought the 100 puts, that's $10 difference, that's $10 wide. So that means you've got $10 per share, maximum risk. If Apple craps out and goes to zero, you can't lose more than $10 per share minus the $2.15 credit that you have remaining in your trade. So that's the thing you can do, you can turn it into a credit spread. If you're worried about the stock dropping on you, you can buy a lower strike put option within the same month of the trade for the put option that you originally sold. So there's your second thing, you can turn it into a credit spread by buying a cheaper lower strike price put option in the same month and try to keep it to an overall credit. That way, if Apple goes back up in price and the whole spread, if everything expires out of the money, you'll retain that $2.15 overall credit. The other thing you can do, obviously, tip number three here, is just close out the trade and take the loss. If you've sold put options on stocks that are dubious and you don't really know anything about and the stock starts dropping, get out, just buy the option back. Most likely you have to buy it back for a loss, but the trade will be over and you won't have to worry about it anymore. You won't have to sweat it out anymore. Losses are part of trading. So if you don't like to trade anymore, the stock's going down, you just don't feel good about the stock. Buy back the option and take the loss. If the stock starts dropping very close to expiration, hey, if you buy the option back, you may still lock in a gain. All that time, the option was decaying in value. So you've got some gain built up. Buying it back, you may be able to salvage a small gain. So look to do that. The last thing is the preferred method, which is rolling the trade down and out. This is my number one repair strategy for fixing a short naked put option. I could have put this as the number one, but I wanted to show you the other choices first. But rolling the trade is the preferred method when you have sold a put option that's starting to go against you. So let's go back and take a look at the Apple trade here. So when Apple was at 145 near the highs, you sold a or someone sold $120 put. And now Apple's come off and this $120 put has gone up in value. And you're thinking, you know what, $120, now that Apple's come down there, I don't know if I want to buy it at $120 anymore. What can I do? Well, rolling the trade can help you not only lower your strike price, but it can still help you retain an overall credit in the trade. So let's take a look at how that works and see what happens. So let's just say, for example, you...let's go out to... So the $120 put for April expires in 41 days. The $120 put is worth about $5.05 per contract. Let's just say you sold that for $3 per contract and now it's worth $5.05. So you've got a $2.05 per contract paper loss built up. And you know what? You're not feeling comfortable with Apple at $120. You think it's going to keep going down. What can you do? Well, rolling the trade allows you to do that. What does that mean? Well, you would have to go out to a further expiration date and look for a lower strike put option than $120 that's trading for the same amount, roughly $5.05 a contract. So manual labor here, go to the next expiration date, which is in March, find a lower strike put option that's worth at least $5.05 per contract. Okay, so in May, we can have the $1.15 puts worth about $5.35 a contract. So that's a little bit more than what you'd have to pay back to buy the April option, right? And you're thinking, well, $115, that gives you $5, another $5 of downside cushion. Apple's at $121 right now. Now you don't have to buy the stock until it gets down to $115 per share. So let's go back to the chart. So your strike price is at $120. Now you've just lowered your risk in the trade by $5 per share. You wouldn't be on the hook to buy Apple until it falls to $115, if it ever falls to $115. So you've just lowered your risk in the trade by $5 and yet you're still going to retain the full value of the credit. Let's go back and look. So the April option, the $120 puts are worth, let's wait for our prices to populate here, about $505 a contract. So you'd have to buy this option back. Rolling the trade means you buy back your original put option, close it out, you buy it back, and then you resell the new put option. So you're buying back the 120 puts for $505 per contract and in May, you're going to sell a new put option for the $115 strike for roughly $5.35 per contract. So you've closed out the original. You're reselling a new one and even gaining a little bit more money. You're getting $5.35. You had to buy the other one back for $5.05. So you're getting an extra $0.30 credit and you've lowered your risk in the trade by $5. So if you think, well, $115, that's not enough wiggle room for me. I want to get an even lower strike price. Well, next thing you do is you go out to the next expiration date. Now you're looking at June. What put option can you sell for at least $5.05 per contract at a lower strike price? So now it looks like the $112.5 strike is worth $5.45 a contract. So now you can lower your risk in the trade by another $2.5 down to $112.5. Is that enough buffer for you? Is that enough cushion? Now you just keep going further out in expiration. Let's look at July here for a second. So the July, let's see which put options are worth at least. So now we are at the $110. These are worth about $5.40 per contract. Right in the middle looking for fair value between the bid and ask. It's worth $5.40 a contract. So now you're thinking, okay, $110, I could live with that. That'll lower your risk in the trade by $10. At first it was the $120. Now you don't have to potentially buy Apple until it gets down to $110. You just lowered your risk another $10 a share. Plus you're going to get even more money. You can get $5.40 for this one. So let's go back to the chart. Take a look. Okay. So Apple's around $121 in change. Now you're all the way down here. You're below the 200-day moving average. It could be a really good support area. So now you've potentially lowered your potential buy price of Apple to $110 per share now. So now you've just given yourself an extra $10 of downside buffer. But the only, I'm not going to call it a downside, the only other thing to that is now you've lengthened the trade out to July. So now you have to wait until July to see what happens with Apple. Your first trade was in April. That expires next month. And Apple could end up going back up and you'd be out of the trade next month. Now by selling the July $110, but now you have to wait it out until July to see what happens. You know, Apple could certainly go back up and everything will work out for you. But until that time, you don't know. So rolling the trade is all about giving yourself more downside buffer and lengthening the trade. Okay. So you have to make the trade up. If you want more downside, do you want to give yourself and how much money is each of these new options worth? So remember, the trick here is that when you roll the trade, you want to keep, try to keep an overall credit. And by that I mean, whatever you have to buy, your original put option back for, you want to resell the new put option for at least that same amount. You can retain the same amount of money in the trade, right? If you're buying something back for $5, try to resell the new put option for $5 as well. So you retain that credit. And the good thing is that you've lowered your risk in the trade by $10 in this case. You first traded the 120, now you've got the 110. So you've given yourself another $10 a buffer that if you do have to buy Apple, well now you can buy it for $10 cheaper than your original trade. So that's some of the things that you can do to help repair, fix, replace a naked put option that you sold in a down trending market. Rolling the trade is your best option. As long as you still feel comfortable with the stock, you know, Apple's a great stock. So you're thinking, you know what, I really like Apple. I just want to lower my potential buy in level. So you roll the trade and that's how you do it. So here you go. Here's your four, your four methods to what you can do when you have a naked put that you sold, that is currently going against you. Just remember, even though the put option is going up in value against you, you just have to remember, where is your buy in level? You know, if Apple finishes at $121 on expiration day in April if you held the original trade, the trade's going to expire worthless, right? Option values move up and down just like the stock does. But over time that option value is still decaying away. So just because Apple dropped and the put option went up in value, that put option value will still start to decay. If Apple stays flat and stays above $120, that option is going to expire worthless. So you have to live through a little pain at first. You know, you have to deal with a little stress to see where Apple eventually ends up. If Apple stays above $120, that put option will expire worthless. So you have to sweat it out for a little bit. If not, then you roll the trade, okay? You don't want to sweat it out anymore. You're getting too nervous. You roll the trade. So rolling the trade is your best method for helping repair replace a naked put option that you're concerned about. All right, so that's your little lesson today. Let's move on to our Saturday synopsis. Let's take a look at the charts, look at the indexes, see what happened this past week in the market and what may happen moving forward. For those of you that follow the market, you know that we had a pretty good down week, mostly for the NASDAQ. A lot of the tech stocks were getting hit pretty hard this week. I think the reasoning that most people are giving is that interest rates are starting to tick back up this past week because the economy, at least here in the U.S., seems to be getting better. People are worried about inflation. If inflation creeps in, the interest rates will have to be raised to counteract inflation. So people start to get nervous, and obviously the hottest stocks are the first ones to get sold off. So we've seen in the NASDAQ this week, those stocks got hit pretty hard. Let's take a look at the SPY, which is the exchange traded front for the SP500 and see what happened. Now the SP500 and the Dow industrials did better or lost less this week than the NASDAQ. So here's our little... This week we can see a pretty good down move. We traded well below the 50-day moving average on Thursday and Friday this week, but you can see where Friday ended up. Open this up a little more. The little dash mark on the right-hand side of the bar is up here. It finished above the 50-day moving average. Closing prices are very, very important in terms of looking at technical analysis, looking at stock charts. You always want to see where a chart or stock finishes for the day. I mean, it could trade all the way down here intraday during the day, but where it finishes is a very important indicator. And the SP500 finished above the 50-day moving average, which is a very, very good thing. We spent all this time down here and it powered higher by the end of the day, got back up above the 50-day moving average. 50-day still trending upwards, 20-day still trending upwards. Got a little curl at the top here, but for the most part still trending upwards and obviously the 200-day still trending upwards. So I'm feeling pretty good about the SP500. It finished above the 50-day, finished stronger, I should say, by the end of the week than where it had been earlier in the day. So that's a positive sign. Let's see if the 50-day can hold come Monday and then give it a move back up. Now, we've been talking about momentum. Obviously, the stock indexes have this bullish momentum and we've been looking at pullbacks to the 50-day moving average being the area that will help contain or support the uptrend. Now, obviously Thursday and Friday, we had a lot of movement below the 50-day moving average intraday during the day, but once again, finished above the 50-day moving average. So that's very important. Let's take a look at the Dow industrials. The Dow is actually pretty strong. Let me blow this out a little bit. So you can see here Thursday and Friday, these last two bars are the last two days worth of trading. Thursday and Friday this week only spent a little bit of time below the 50-day moving average, more on Thursday than Friday. And look at Friday, you can see the dash mark on the right side of the last bar finished above both the 50-day and the 20-day. So that's very positive for the Dow. The Dow is looking good. We've been talking how the dips have been contained by the 50-day or 20-day moving average. So the Dow still looks pretty good. Finished strong. I think that momentum can carry over to next week. So now let's take a look at the NASAC, the weakest of the three. And let's take a look here. Blow this up, pull it down a little bit so we can see better. Now, obviously, we had a huge move Wednesday, Thursday, Friday this week. These three bars right here, a lot of selling in the NASDAQ. Lots of selling well below the 50-day moving average. There's a lot of damage that's done here. As we talk about, the market takes the stairs up and then takes the elevator down. The down moves are always a lot faster and more furious than the up moves. That's just how the market works. Everybody's in for the long haul and when things start to get a little rocky, everybody jumps out at the same time. So that's why we call it the elevator down. There's a lot of damage here, but the good thing is that you can see the dash mark right here on the right side of the bar means it regained all of what it lost intraday and it recovered a lot of what was lost on Thursday. So that's a good sign for the NASDAQ. When it was trading down here around noon time yesterday, everybody's getting nervous, a lot of people are selling out and then things start to rally. That's what happens. Things just turn on a dime like that. So we had a good rally into the close end of the day, still well below the 50-day moving average. So the NASDAQ has some work to do. There's big moves like that. You will see a consolidation. You'll probably see some sideways trading. And we had three good days, Wednesday, Thursday, Friday. Three good days here have down moved. It has to digest that big sell-off. There's not going to be... Not everyone's going to just jump back in and buy it all up considering the sell-off. So it's going to have some back and forth. You're going to have some meandering. You're going to have some flatlining here. Moving sideways a little bit, just taking in, digesting the down move, and then hopefully we'll get the move back up. I still think the economies are starting to get better. Vaccines are rolling out from coronavirus. Interest rates are starting to move up a little bit, yes. But they're still extremely low. Do you want to put all your money back into sitting in a money market account that is still only paying 0.2% versus stocks which typically have a 7% to 10% return per year historically for the S&P 500. Companies are still making products. They're still having good earnings. People will still buy their stuff. So earnings are what drive stock prices. Yeah, we're going to have sell-offs talked about this last week. We're going to have sell-offs. But eventually the market will find its way back up again. It's scary while you're in it, yes. And if you have short-term trades on, you do have to follow your plan. I got ticked out of a couple trades this week on the big down move. It's just part of the process. And then when I see things bottoming and starting to move back up, I'll get back up again. That's just how it works. You take the good with the bad. But overall, we know the stock market goes up over time. You just have to learn to live with the sell-offs and manage your trades best as you can. Those look good. The NASX got some work to do. The Dow and S&P 500 a little bit stronger. Let's take a look at some individual stocks. We were just talking about Apple in our naked put example. Let's take a look at Apple and see what's happening. Apple has been down. It's below both the 50-day and 20-day. The 20-day has now crossed below the 50-day moving average. You don't really want to see crossovers like that. Apple, there's some damage that's been done to Apple. You can see it really hasn't gone anywhere in a while. It went up down sideways up. Now it's back down. It's back down right in the middle of this apex of the triangle from where it broke out. Apple is just now consolidating in this range here. I'm long Apple, but I'm long for the long haul. I'd like to see Apple really start to move itself higher again, but there's been some soft. There's been a little damage here. Apple will probably maybe even trade a little lower. Might even hit the 200-day moving average, but for me, I'm taking a long-term approach here. I know Apple will eventually go back up again, but if you're on short-term trades, if you're trying to buy call options on short-term expirations, it hasn't been easy for you because Apple is going down. My assessment is Apple will go up eventually in the long-run short-term. It looks like it's probably just going to meander here, especially with this crossover. I'd like to see Apple go up. If the rest of the market could find its footing, Apple will continue to go back up over time, but for now it looks like it wants to just kind of meander around here. Let's take a look at Amazon. Let's take a look at the most popular stocks, because that's what people like to hear about. Amazon had some selling this week, definitely. We're starting to see some movement here. It's been stuck in this wide channel, had the NAS pop below, up below the triangle pop below the 200-day moving average. This is very important. Falling below a 200-day moving average is a big deal. The only thing holding Amazon at this point is the lower bar of the channel. If the channel holds, Amazon will go back up. It should go back up. But the rest of the market itself, the general indexes have to be strong come Monday morning. If not, Amazon could drop through here, and we could probably see the selling accelerate. Good thing is that you can see ... Let's open this up a little. I'm going to go to the other side of the last bar here, finished near the highs. That's good. Rallied all the way back from the lows intraday. That's a good sign, but you've got to use this bottom of the channel as the last line of resort. The way that Amazon's been moving, most likely it's going to tick back higher. If you can get the indexes to tick back higher, Amazon should move up as well. This could be potentially ... These are no guarantees. If you're willing to step in a little, this could be a good bounce point. This is not a recommendation, but these are the things that you have to look for when you're looking at charts. Let's take a look at Tesla. Tesla got hit pretty good too, and it's on its way down. We've been drawing these triangles. First congestion here, second congestion here, and then last week we drew this little one. Tesla has fallen out and down below this most recent congestion pattern. We originally drew this one here, and he gave it a little time. If you had bought some longer-term straddles or put options, those should be paying off now, because Tesla has really fallen off the cliff here. It's fallen below both the 50-day and 20-day average curling over and crossed down below the 50-day. It hasn't touched the 200-day moving average yet. The good thing for Tesla is that on the RSI indicator, which is down here, it's getting to a sold-off level. 25 or below is considered oversold. I got the indicator set at 20, so if it falls below 20, that means it's really oversold. There's been some good damage that's been done to Tesla. It hasn't come back to the last breakout point yet, maybe $425 a share. But what we need is the overall market to get its footing, and then Tesla itself will tick back up, but it's come off a decent way. You know, it has to digest the down moves. It's not going to just all of a sudden rally back up to $900 in one day. It has to digest the move, so you'll get some more congestion here, most likely it's footing and hopefully it can move back up. But Tesla, some good damage over the last couple weeks. What else we got? Google? I think Google was strong this week. Yeah, Google's still doing alright. It didn't get hit like the other NASDAQ stocks. Google actually had it was up $63 a share yesterday, Friday, March 5th. So Google's looking pretty good. I do want to show you two stocks. Costco had earnings come out the other day. Good earnings too, but yet the stock sold off. Look how just this huge waterfall down. I mean, big move down. Costco, what's wrong with Costco? Everybody shops in Costco, great company. I mean, this is surprising to me, especially during the pandemic, these stores where people have to buy all their stuff from, Costco's one of those stores. It's hard for me to understand why there's so much selling involved here. Costco's come all the way back to really the breakout point from last March. We can sort of draw a little bit of a triangle pattern here to see what happened. You got the congestion pattern here and then Costco finally moved out and now you can see basically it's right back to where it was. The biggest thing for me is here on the RSI indicator closed at 1806. That is well, well, well oversold. Falling below 20 is a well oversold stock. If I had any interest in Costco whatsoever and I may look for some action on Monday, I never like to try to fish here. I mean, you know, everyone likes to do it every once in a while, so I may try to take a small position. Costco really oversold, especially on the RSI doesn't necessarily mean it's going to bounce all of a sudden and go all the way back up. It just means the selling is probably overdone here. Let's put the let's put the let's put the volume on here just to see what the volume look like. So I don't typically look at volume as an indicator, but sometimes when there's huge, huge volume at an either a top or a bottom it could mean a turning point. So look at the volume spike yesterday on Costco. That this burst in volume could mean that was just everyone was just puking and getting out and that's the capitulation point. Okay. I mean the the average volume is down here, but yesterday huge volume on the huge down move. So that could that could be a signal that the selling is over in Costco. So, you know, just take that as you would it's not it's not a recommendation it's just something that I that I noticed. So Costco here I may look to step in by a little on Monday. Same thing with Walmart not as not as oversold as Costco, but Walmart's been getting hit too. Both averages 20 and 50 there are trending down. It's kind of like the waterfall sell off, but it's it's a little low on the RSA not an oversold territory. Let's take a look at let's take a look at the volume for Walmart. You know, there was no spike. So there's no capitulation yet Walmart could keep dropping. So I'm not as enthused about trying to bottom pick Walmart as I would be Costco. That's just me some of the indicators. This isn't as oversold as Costco and the volume didn't capitulate like Costco. So Walmart even though it's come down a decent ways, there could be more selling just, you know, based on what I'm seeing on the charts. What other stocks do we like to look at? Let's take a look at let's take a look at Twitter. Twitter has been doing pretty well except for this week. You know, it's come down made this nice new high and then kind of gave most of it back trying to close this gap here. So Twitter is off a little bit AMD we always like to take a look at AMD AMD still in this channel here tried to break below it but came back trading right on the 200 day moving average so AMD make a break time right here. I think it's going to bounce and possibly move back towards this down trending channel line. Still like AMD for the long run we've got puts that we've sold in our service on AMD, you know, well down here so we still have a lot of cushion AMD has definitely sold off in this down trending channel. So that is the move for now but probably is going to tick back up somewhere up here that's just the way it should trade finding support on the 200 day moving average AMD. What else we got let's look at Microsoft Microsoft same thing had the down move this week down back below the resistance line here hugging the 50 day moving average so Microsoft so doing okay didn't get hit as hard as all the others but still had a little bit of a sell off this week but still looking pretty decent. What other stocks do we like to take a look at PayPal we had looked at last week PayPal got hit to now below both the 20 day and 50 day had that cascading downward move just like the rest of the Nasdaq stocks I like PayPal for the long run we haven't done anything on PayPal yet but it is a possibility has come down here not oversold yet so we'll see if we need the overall general market indexes to move back up next week and we'll have all these other stocks going up. What else we got Oracle had a pretty massive up move yesterday over $4 a share Oracle hitting looks like all time highs let's take a quick look at Oracle all time yeah look at that all time highs looking good strong for Oracle I think that's about it that's about it most of the stocks that we like to take a look at GameStop we'll just take a look at that as well because that's still out there actually was up this week GameStop trading at $137 a share had the big up move had the big down move and then had the spike so now it's kind of congesting and now looks like it's breaking out to the upside again a little I don't know what's going on with GameStop I'm not trading it if I was doing anything maybe I'd sell some way way out of the money puts but I'm out for now play it as you will. Alright so that's it let's take a look at the SPY one more time get the last look here SPY good thing is that it finished above the 50 day moving average and we're hoping that on Monday these indexes continue where they left off and start to move higher so we can get back into this upward momentum so if you're gonna trade this week you know stay small look to see if the support is holding and just remember what we learned about repairing the naked put option sales okay so that's it for your Saturday synopsis let's take a quick look at our website you know the drill smartoptionseller.com talking all about selling put options that's what we do download your free put selling basics guide come to this page put selling basics put in your name and email address we'll send you a free copy learn all about how to sell put options our services tab we have two newsletters our smart option selling newsletters vertical spread trader we sell put option credit spreads like we talked about with the apple example you can trade credit spreads right off the bat as well and our one on one coaching if you need some help alright hope this has given you some value give me a thumbs up in the youtube channel here don't forget to subscribe if you are not subscribed yet hit that red subscribe button leave me a comment send me an email love hearing from you I will always answer today wishing everyone a great weekend and a great week ahead I'll see you next Saturday this is Lee Lowell signing off