 Hey, everyone, Lee Lowell here from smartoptioncell.com, today is Saturday, June 11th, 2022. Welcome. Welcome back to another edition of our Saturday synopsis. What do we do here? We look at the charts. That's what we do. I'm a technical analyst. I'm a chart reader, last 30 years in this business, in the stock trading business, option trading business, commodity trading business. That's what I've been doing, and I've been using the charts to help me gauge when it's time to get in and out of trades. The charts tell me everything I need, even including the underlying fundamental data of a company. We got these two camps, fundamental analysis and technical analysis. Fundamental analysis is when you look at all the financial information of a company, of a stock, the PE ratio, the earnings, the growth, the revenue, dividends, all that good stuff, and that's very important, but in my opinion, all that information gets reflected in the charts, so that's all I really need to concentrate on. So that's what I've been doing, and I'm here to show you in these free videos how I use the charts, the patterns that I see, the support and resistance levels, the indicators that I use that help me gauge when it's time to take a trade and when it's time to step back. So as we do every week, every Saturday, we look at certain select charts. We look at the indexes, and we look at more popular individual stocks just to show you what I'm seeing, and then we just go from there. All right. Let's just jump right in. Let's just jump right in like we usually do. We always look at the SPY, which is the exchange-traded fund for the SP500. It gives us the best overall view of the market as a whole. I like to look at the indexes, because a lot of stocks will follow the indexes, because there's not a lot of information on a day-to-day basis to move individual stocks, so they'll follow the indexes. So if you have a good handle on how the indexes are moving, then you can focus on individual stocks. The indexes, I'm talking about the SP500, the NASDAQ, and the Dow Jones Industrial. So we look at the SPY, and we look at our charts here. This is a daily bar chart that I use, the open, high, low, close bars. I don't use candle sticks, just a preference. And my look-back period is about two years real estate on the screen here, and each vertical line is one day's worth of trading. I mark up my charts mostly with channels. You can see these channels that I've drawn just to give you a visual and me a visual of which way the market is trending. We like to follow the price action. The price action is which way the prices are moving in trending. Are they in an uptrend or a downtrend? That's really all we have to see, or a sideways trend. So we draw these channels to just let us know which way the market's moving. And I have three indicators, three moving averages. I got a blue 20-day, a red 50, and this green 200-day moving average. Those are three very popular moving averages. A lot of people follow them. So when enough people are following the same things, prices tend to react the same. So we like to get in on that action when most people are looking for the same places for prices to bounce or to get knocked down from. And we look at support and resistance levels as well. I use the RSI down here as my only other indicator, 14-day RSI. It's an overbought, oversold indicator. I use the 80 level and 20 level as my overbought, oversold levels. So there you go. That's my simple charting methods. So we like to look at the SPY first and just see what's been going on. Obviously, if you've been following the markets, the market had been moving up nicely, nicely, nicely from the COVID lows and back in March of 2020 until we reached this point, first day of 2022, and the market's just been in this downtrend. Okay, it's been in a downtrend. It was here, this little section right here until March, it popped up, and then, but April just knocked it right back down again. We found some lows here on the SPY, which is also 3800 on the SPX, the big S&P 500 index. This is just 10 times smaller. So 380, right now, is the low of the range since January to middle of May. We had this nice move up over the last two weeks ago. We had this nice bounce here. And I thought this was the beginning of the possible next leg higher with a caveat that the market could always come back down again. So we were in this strong downtrending channel right here. Had this up move, which was nice because it moved outside and above this downtrending channel. You can see these couple of days right here, which was a couple of weeks ago, moved up and outside of the downtrending channel. So that's a good first sign that the market is gaining some strength and wants to potentially move higher. But what we had over the next 10 days of trading or so was this very tight range right here. We had this back and forth, up and down. There's a lot of this choppy action, which is a very small range compared to all these ranges we had over the last few months. So this week, week and a half of trading was very tight, very choppy, very small. And so what usually happens in that case is that the ranges get so tight that eventually the market will blast out one way or the other. So what we can typically do is draw, let me draw this out for you. So it was creating what's called a flag pattern where you have this long kind of flagpole here and then you have more of a triangular flag. And I'm gonna darken this up and make this a little bit easier to see so everyone could understand what we're looking at here. So you got the flagpole, okay. So that did the wrong one, excuse me for a second here. Move this back to blue and move that down to one. Okay, so we want to, what we wanna do is move this one. Okay, so we wanna edit this one, get the color in there, get some size in there. So I want everyone to see what I'm looking at, okay. So here we wanna edit this and make that larger. Sometimes as I say, manual labor involved, okay. Darken this up, make this wider, okay. So what we're looking at here now is you can see, let me darken this up, okay. So now what you can see here, we've got this flagpole and this symmetrical flag pattern right here. So typically what will happen once the trading range gets so congested enough, it's gonna blast out one way or the other. It's storing up all this energy. Typically, typically the price action will blast out in the same direction from where it had been coming from. So it came from the downside moving upwards. So the theory is that it should have broken out to the upside. But what happened this week, Thursday, Friday, there was some song that came in in anticipation of the inflation numbers that came out yesterday, Friday morning in the US, the CPI numbers. And inflation was even stronger than it was estimated to be. Higher inflation, biggest inflation numbers since the 1980s, early 1980s. So 40 years, highest inflation. And that just knocked the market down. You can see we had on the SPY, this gap open. Here was Thursday's trading, Thursday closed here, Friday opened down here. So we had this gap open lower, which was unfortunate. Inflation numbers are a lot worse than expected, not a lot worse, but worse than expected. So that just leads the market to believe that the US Federal Reserve is not only going to raise interest rates, which they were already planning on doing, but potentially raising them more aggressively at a higher clip. And when interest rates go up, it's not the greatest thing for the stock market because now people can start pulling their money out of stocks and putting their money into fixed income securities that will start to offer better returns on your money. Higher interest rates, better return on your money. And especially for technology stocks that rely a lot on borrowed money, now interest rates are gonna cause their payments to go up, their loan payments to go up. So technology stocks that rely on loans and just having to borrow money get knocked down even harder, okay? So we've kind of got this double whammy, rising interest rates, not the greatest thing for stocks. So as you can see, the SPY had this big move down. On Thursday started the reaction and then Friday and we ended on the lows on Friday, yesterday, June 10th, 2022, right here, this day right here. So not a good last two days of this week in the market, just knocked everything back down. So now we're eyeing this level right here, the 380 mark, which was this low right here. Is it gonna hit it? Is it gonna tag it? There's probably a good chance the market will get some momentum or keep the momentum going come Monday this coming week. And it's certainly gonna gun for this 380 level on the SPY. Where it goes from there at that point, it's anybody's guess. We got a lot of room to go down some more, which I don't like to see. I'd rather see this thing go up. Obviously I have investments, long-term investments that I wanna go up in price as well. And so do a lot of other people, but we can't argue or fight what the market is telling us. The market is telling us that, with rising interest rates, inflation, COVID still out there, the market wants to keep selling off, wants to just keep making individual stocks much more attractive. I mean, we are gonna hit a value point where stocks just can't pass them up. And I've been buying on the way down little bits and pieces I've been saying in these videos that I nibble when I think stocks have really gotten hit pretty hard because I know the market will turn back up eventually. If we look at the long-term chart of the market, the market goes up over time. I mean, that's just how it works because the market, I say this every time, the market is made up of real companies that create real products, that create real earnings. And if companies are profitable over the long run, their stock price has to go up as well. So that's how a market works. And at times we just have to deal with these pullbacks and these are pullbacks and you have to look at them as a better buying opportunity as long as you're focusing on quality companies. Now, if you're focusing on these real high tech companies that have no growth, no earnings yet that you're hearing about on websites and chat rooms that everyone's just piling in because everyone just wants to pile in on this tech company that doesn't really have any earnings yet, that's when you can get yourself in trouble. I mean, those stocks will go up for a while and then the rug just gets pulled out from under it. We've seen all these speculative stocks that have just been, have gotten destroyed over the last six months. And they were darlings on the way up, everyone was piling and now they're just crap back out. But if you focus on quality stocks that have been around a long time that create products that people like to buy over time then you will be rewarded in the long run. And I bring this stock up just to show you this is Coca-Cola, okay? A stalwart of a company, one of the best brands on the planet, just look at the way the stock has been going up, okay? Even in rising interest rates, let's look at the long term of Coca-Cola. Over time, it's just gone up, okay? You'll get periods of pullbacks, but over time it goes up. That's just how you want to invest for the long run. Now, if you're one of these more speculative traders, you're gonna get hurt. We look at stocks like Palantir, okay? These are companies, I'm just showing you companies that I know off the top of my head that everyone was involved in, Palantir going down, Neo, one of these electric vehicle companies, I believe that's what it is, going down. I always show Shopify. Now Shopify is not a bad company, but it was up at $1,800 this year, now down under 400. So a lot of these really expensive tech companies, even stocks like Adobe, which is also a great company, $700, now under $400 a year. These companies have just been getting hit. It just, let's see, what other stock here? This is Tilray, I mean, it had the high here over $65, and now it's down under $5. Even AMC and GameStop, AMC, this was $70, now it's down under 15. GameStop hit that $500, almost $500 at the peak of early 2021, and then it's come back down as well. So if you're gonna play that kind of game, you gotta be aware of what could happen. If you have profits, you better take them quickly. Go back to Coca-Cola, it's a slow mover over time. It's not sexy, it's not glamorous, but it's got great dividends and it rewards you over time. So that's all I'm saying. The quality will reward you over time. Now, yes, it's fun to play with these spec stock, these speculative stocks over time. Sometimes, I should say, it's fun to play with them every once in a while. If you have a little money to burn, take a shot, but if you're gonna stick around for a while while it's starting to come back down, you better take your money off the table. That's all I'm saying. There's nothing wrong with doing that. It's fun every once in a while, but for the long run, you wanna stick with companies like Coca-Cola, because they've proven themselves. So that's all I wanna say about that. So if we go back to the SPY, the index, we're in a tough spot right now. So the market really got hit the last two days, so let's put the market on edge. We could have some follow through come Monday and next week, 380 is the next level of support here. We gotta see if that can hold. If not, then we can keep going down where the bottom is we don't know yet. But there's the headlines that are still out there. The Russia-Ukraine war, COVID's still lingering around, inflation, interest rates, supply chain bottlenecks are still out there, although they're starting to clear up a little bit. People are just on edge. That's all. When people are on edge and we know interest rates are going up, the first move is to sell stocks. But at some point, we will hit a value level and buying again, we'll come back. We just have to wait these things out. Let's look at the NASDAQ. We look at the QQQ, QQQs for that same thing. Looks just like the SPY. Thursday started to come off. Had the air pocket open, gap lower and finished near the lows of the day. You can see the little dash mark on the right hand side of this bar. That's the close of the day. The dash mark on the left side is where we open for the day. So the NASDAQ's down as well. We can look at the Dow Jones. We use the diamonds. This is the DIA ETF, same thing. Air pocket, Thursday lower, Friday finished on the lows as well. We can look at the e-mini futures for the NASDAQ and the SAP 500. So here's the e-mini futures, which trade basically 24 hours a day. So you're not gonna see a lot of gaps, gap openings because they trade all throughout the night. And so you can just see the last two days here was Thursday, big move down and then Friday, big move down as well. So the futures trade, like I said, basically 24 hours a day during the work week. And so you'll never have those gaps that you'll show on the SPY because it's closed from 4.30 PM until 9.30. I'm sorry, 8 PM, their aftermarket goes till 8 PM Eastern and then it doesn't open again until 9.30 AM Eastern the next morning. So you'll have gaps on individual stocks and exchange-traded funds. But the futures contracts will have trading all the way through. Anyway, let's look at some of the individual stocks. Tesla, we always look at big one. Still flirting with that $700 support level area. Tesla was holding up pretty decent this week and then it just couldn't hold with the rest of the market, it got sold off. So here was Thursday. Thursday was a big down move day in the market but Tesla was doing all right and then it started to come off at the end of Thursday and then Friday. It came in contact with the $700 level again. So will that hold? Will $700 hold? It seems to be a magnet right now. May go down a little bit, pop up a little bit but it's trading right around that level. Depending on where the rest of the indexes are. If the indexes keep crapping down then Tesla most likely will come off as well. If the indexes are trading a little sideways, not much action, Tesla will probably go higher because a lot of people love to buy Tesla. So that's Tesla right now trading around that $700 level. Apple, another barometer for the indexes. Apple makes up a big part of the indexes. Fell through the support around 140 is that level that I've drawn on here. Finished the day on the lows yesterday right around $137 a share. Here's Friday's bar. So Apple finished on the lows and now it seems like it's come back down into this down trending channel that we drew from a while ago. You can see here it had popped out above it, popped out here, this action right here popped out of the channel. But now with the last two days of action has now moved back down into the channel. So we may see it come back down towards the lower end of it over the next week if the market keeps selling off. So you have to, it depends on what your motive is. In our newsletters, in our smart option seller and vertical spread trader newsletter we sell put options and put option credit cards which are both bullishly oriented types of trades. And as I've been saying for the last few months we've been taking it a lot lighter. We've been taking very small positions, smaller positions than we normally take, less positions than we normally take because the price action is telling us it's not the greatest time to be in the market. So when the market's telling you wants to go down there's no sense of putting your money on the line for trades that may not work out or may not work out for a long time. So we've taken a step back, we've lightened up on our positions just because the market is a little bit rocky right now. And we sell put options. Let me bring you to our website here on our website, our put selling basics right here. You can click on this on the header and we'll send you a free copy of how to sell put options. What put selling is, why we like it and get a free copy. And that's what we do. And one of our newsletters we sell put options. The other newsletter is selling put option credit spreads. Like I said, both bullishly oriented trades. So we're taking it lighter now. You have to understand what the market is telling you. And there's nothing wrong with being in cash. Cash is a position, it's okay to be in cash even though it doesn't pay you much as it's sitting in your bank account or brokerage account. But it's better than putting it at risk in a situation where the market's going down and you're trying to get long or be bullish and the market keeps going against you, you're gonna put yourself in a losing position most likely. Now, if you're shorting the market and you're buying puts and you're scalping intraday and you're selling, yes, this action has been pretty good for the short sellers and buyers of puts. But you have to know which kind of put options to buy or when to short because you can get chopped out. So be careful if you're playing that game. We don't do that. We're waiting for our bullish setups. So we're just taking it a bit lighter right now. That's what we're doing. Let's look at some other stocks here. Walmart, another stalwart, Rhymes. I like Walmart. I've been telling you I've been buying some Walmart but some more yesterday around the 120 level, hoping that we can hit maybe a double bottom here got way oversold here bought first round here and came back down yesterday. So I nibbled on a little bit more not putting a lot of money and just nibbling on some shares here and there. But Walmart finally came out of this sideways channel here. Got hit just like everything else. It's on the defensive right now. Even quality, quality stocks, even Coca-Cola. And I bought some yesterday as well on this move down. It could keep coming down possibly to connect with the 200 day moving average, right? AMD, AMD another stock that I love. Had a nice move over the last two weeks. Got back up to $110 a share. The level for me was the $100 level. That first, was that first support area knocked through that. So the second support area right now is this $85 level. Just like everything else got knocked back down finished at 94.82. So AMD still within this channel here, this big down trending channel just like many other stocks. What else? So Amazon went post-split this week. It split its shares 20 to one, 20 for one. So it used to be trading around $2,200. And it opened up on Monday this week. Where are we here? So it opened up near 120, went up to close to 130. And you can see now it's back down under 110. So Amazon split the shares much cheaper now, dollar basis. Nothing fundamentally has changed about the company but it allows smaller accounts to get into full shares now instead of buying fractional shares. And $100 right now is that probably support area, next support area. And Momentum will probably take it down a little bit next week if we get some follow through. So there's Amazon coming down. Google, we don't usually look at Google too much. Google also in a down trending channel. Most stocks are in down trending channels. You'll get a few that are doing okay. I show this stock, Con Edison, this is ED. And right here I'll show you ED, Consolidated as in this is a utility company mostly in the New York, East Coast region of the United States. Utility companies going up. So this is ED been going up nicely, bucking the trend. Energy companies we know, price of oil been going up. Gas is going up. This is Exxon mobile. So the energy stocks, the oil stocks have been going up for the last year or so. Exxon, we can look at Chevron. So oil stocks doing well. So there's a pocket of companies that are doing okay. Let's look at Procter and Gamble because we got some companies that, people still need to buy things for their everyday living. And companies like Procter and Gamble, although it's been coming down too, still sort of has this uptrend but it has this sideways action here. So Procter and Gamble, Colgate, Palmolive, also an everyday company that provides everyday products. Very volatile but sort of in this sideways action here. So it's been tough. There's no doubt it's been tough trying to pick stocks. Let me go through my list here, see what else I can show you. I always concentrate on the healthcare stocks. Let's bring that up. The XLV, this is the ETF for the healthcare stocks XLV. Been going sideways, let's look at the healthcare stocks themselves, this is Merck. Still doing pretty good, Johnson and Johnson. You know, most of these have a mostly uptrending channel. Pfizer sort of sideways but had this nice little up move here. Bristol Myers, you know, we play these stocks in our newsletters. Bristol Myers has this nice move up here. So if you want a lot of these stocks in one shot, the XLV. And we have a position that's expiring next week. Hopefully the market will stay afloat for one more week we can get out of the trade or we may have to roll our trade. So that's the healthcare stocks. Oracle, position we have, we have to watch that next week as well. Oracle this week had this nice up move here and then it just got crapped out again. So we're watching Oracle. Anything else that's really worthy? Netflix still down in the dumps. I think some of the big brokerage houses issued a sell rating on Netflix yesterday, Friday. We looked at, so Disney as well. Another company that I've been talking about had bought some at 130. You know, one of those companies that everybody knows, everybody loves, I believe it's gonna go up again in the long run, but now flirting with the $100 support level. Right here, hanging on that 100 level. If we look back long-term, let's go back to the long-term chart. Let's look at the monthly. Here's the COVID low, right around $80 a share. So, you know, maybe Disney will be gunning for that $80 level and it'll come in contact with the 200 day moving average. You know, this could be a buy of a really good price right here. Disney comes back down to the 80 level, connects with the 200 day moving average, which is still sloping upwards. This could be a nice nibble buy area or maybe even more than a nibble. So, I'll be keeping an eye on that level as well for Disney. Now, one of the other things you can do as we do, you can sell deep out of the money, put options on some of these stocks that you really like, that you'd be really interested in owning. Let's take a quick look at some of these on our option chain and not that one. Here's our option chain at Interactive Brokers. So, if you're looking for potentially, you know, wanting to buy some shares, here's AMD. So, AMD, last trade, $94 in change. If you're looking to potentially buy AMD, a lot cheaper than we're currently trades and getting paid to do that, you know, here's the September expiration. So, a little over three months from now, the 45 strike puts, here's the puts on the right side. Here's the bid ask, 45 strike puts, which is more than half of where it currently trades. It's now at $94. This is over a 50% cushion. You can sell these 45 puts and get at least $33. 33 cents a contract, that's 33 actual dollars for every contract that you sell that obligates yourself to buy 100 shares, potentially at $45 a share. That means AMD has to fall by more than 50% by September in order for you to have to follow through on your obligation. That's what selling puts us all about. You know, that's the way we're doing it. We're looking for trades with lots and lots of cushion. I'm talking 50% cushion from the current price of the stock. If you don't understand what I'm saying, get our free guide, get our free put selling guide, and it'll show you all about that. Even Disney, you can take a look at Disney. Disney's right around $100 a share. Let's go out to the September. There's probably not gonna be as much cushion in Disney as there is in AMD, but let's take a look anyway. And my sweet spot is, you know, I like to sell, we like to sell contracts, put option contracts for at least 25 cents with at least a 20% cushion. We're talking 50% cushion here. So the 55 or the 60 puts on Disney while it's trading at 100. If you like Disney at 55 or 100, you wanna potentially buy those shares, you know, you could look at selling some put options here. These are not actual recommendations. These are just ideas of throwing these out to you just so you understand how much cushion you can get now for some of these stocks. If you wanna make a little income, you sell put options, but you obligate yourself to buy these shares. So you better make sure these are stocks that you'd be willing and want to own. We go back to the charts here. Disney, 55 or 60 puts, you know, that's all the way down here. Disney's at 100. And the last time Disney was near 55, 60, and that was below the COVID low, 55, 60. We're talking, you know, down here. Last time it was at that level was sometime in 2012. Okay, AMD, we were looking at the 45 puts on a daily, let's look at the daily here. So 45 puts, you know, are down here. You got all this cushion down here. And the last time AMD was at $45 a share was, you know, sometime in, you know, 2020 AMD. So not that long ago, but look how it powered higher since then. So these are things that we look for. We look for real deep discounts on stocks that we would potentially wanna buy a lot cheaper than we're currently trading. So this is what selling put options is all about. Okay, so get your free guide, go to our website, and it'll show you what we'd like to do. And if you wanna get on board, you can join one of our newsletters. Let me go to our website here. Hover your mouse over the services tab. We have our smart opposite seller newsletter, our vertical spread trader newsletter, and our coaching sessions, if you need help getting to that next level of your options trading career. All right, so let's go back to the charts last time. That's what we're seeing. One more time, SPY. The last two days were not good. Was definitely not good for the market. We probably have some follow-through next week, my gun for this 380 level, and that's gonna follow over to all the other stocks and indexes as well. They all feed on top of each other. So unfortunately, not much good news coming from me this Saturday. I want to see this market to go higher. I'm gonna have to wait a little bit longer for a lot of these horrible news headlines to clear out some of these issues to clear up. We need inflation to come down. We need prices to come down. We need gas to come down. We need food prices to come down. But until then, it's gonna be a little while longer. We're gonna have to endure with these ups and downs. Hopefully the market could find its footing at some point. And then we're back to clear skies again. All right, so that's all for me here today. I hope this has been helpful. Give me a thumbs up in this YouTube video. Don't forget to subscribe, hit that red subscribe button in the bottom right hand corner of the video. Leave me a comment, send me an email. I always try to answer your emails. I'm here to help everybody. I do these for free. I want everyone to become better traders, better option traders. All right, that'll do it for me. I hope everyone has a great weekend and I'll see everyone hopefully here next Saturday as well. This is Lee Lowell signing off.