 All right, here we go now. Hey everybody, Lee Lowell here from smartoptionsaw.com today's Saturday, July 23rd, 2022. We're back for another edition of our Saturday Synopsis. I was out last weekend, didn't have a video for you, but I'm back, ready to go. And what do we do here on the Saturday Synopsis? We look at the charts. I'm a chart reader, technical analyst. I use the charts to help me decide when to get in and get out of trades. Fundamental analysis, which is another way to value stocks is not really my thing. That is where you look at all the underlying data, price, PE ratios, sales, revenue, earnings, dividends, all that good stuff. But it's not for me. For me, everything is in the charts. All that information is reflected in the charts. You got millions of people trading in the markets every day and all that information's out there in the public. So it gets reflected in the charts. So that's what I do. So let's just dive in as we do every Saturday. We'll look at the charts, we'll look at the indexes, we'll look at some individual stocks, show you the more popular ones, specifically some stocks that have made some moves so we could see it on the charts, see how I would have seen it, what we would have done with it, and just go from there. So as we do every Saturday, we look at the SPY first, which is the exchange rate of fund for the SAP 500. Gives us the best overall view of the market. What you see in front of you is a two years worth of data on a daily chart. Each line here is one day's worth of data, spanning about two years in time. A couple lines on here is my moving averages, a 20-day, 50-day, 200-day, all simple, and down here is the 14-day RSI. That's pretty much all I use other than eyeballing the charts. Just following the price action, the price action is what direction do you see the market or the stock going in? And that'll help you decide your course of action. Basically, the best thing we can do is draw these channels. Got these blue lines here, connecting the tops of moves and mostly the bottoms of moves and it creates a channel. It gives you a good visual of where the market's headed. If you're in the market and you've been following the market, you know we've been in this six month long downtrend. Almost seven months now, a little more than six and a half depends on July finishes. Since January 1st, right here, beginning of 2022, it's been all downhill. Some fits and starts, you know, little rallies, but they've all been sold so far, okay? But where are we now? I'm actually feeling pretty good about what happened this week. So from January through June, we've been enclosed in this downtrending channel. Let me make this a little bit thicker so you can get a good visual here because I wanna show you what I saw this week. So give me a quick second here, little manual labor. And so here you can see the clear downtrend here. And I think last week, I may have even started to draw this a little bit of an uptrending channel. See the line here and a line here. And that's exactly what's been happening. So the good thing that I saw this week is that, and what I've been saying and what I've been writing to my newsletter people is that if the market can move up and outside of the downtrending channel, that would be a good start. And that's what we had this week. Let me open this up a little bit here. So we got Friday, which was yesterday, Thursday, Wednesday, Tuesday, Monday. So every day this week, the market, the S&P 500 rallied up and outside of the downtrending channel. So that is a good first sign that maybe we finally turned the corner because we've seen these rallies, these little rallies have all been sold. Okay, the last major one was right here, where it looked like everything was going up and then it just got knocked back down. Okay, so the same thing might've been starting here, but instead of getting knocked back down, it powered through and out of the channel. And here is the 50 day moving average right here, this line. And we got above that as well. So that's another good sign that maybe we finally turned the corner. A lot of this news that's been driving the market has been factored in. And what news is that? That's inflation right here in the US and around the world. Inflation is at the highest levels in the last 40 years. We know that the Federal Reserve here in the US is raising interest rates. That's no secret. And the next meeting they have is next week, Wednesday we'll know what the Fed or how much the Fed is going to raise interest rates. It's gonna be either 75 basis points or a full point. Either one. So that's not a surprise either. The full basis point is not as expected as a 75 basis point move, but it's still in the realm. People are sort of expecting it. So it wouldn't be such a shock or jolt to the system if the Fed raises by a full point. So I think a lot of that news is sort of being factored in. The war on Ukraine is, we know that's happening. COVID's still out there. We know that's happening. So there's no new news anymore. We're just grappling with the news that's been out there. And those four major news stories have been the biggest issues in what's been driving the market down and the supply chain issues as well. But I think that's starting to ease up too. So eventually all this bad news gets factored in and gets kind of put on the back burner and everyone starts looking forward down the road to sunnier skies and better days. So have we finally turned the corner? It started to look that way. This week was a good move. Every day this week, we ended higher. Although the market we put in a new high today, you can see the top of this bar was a new higher, a new high, it actually ended lower. You can see the little teeny dash mark on the right side of this bar is where the market closed today. So we actually closed lower than we did Thursday, but we made a new high. So you can see the momentum is on an upward trajectory. So we'll see how the market starts to play out early next week. If there's any momentum carrying through to the downside or not, what could happen at this point is if the market does come down, maybe it could bounce off the top edge of the channel and then go higher or it may just keep going from this point forward. So I'm just a little excited about what I'm seeing here. We had a good move this week and the best thing would be to have that momentum keep going and then just the second half of the year, end on a good note. But be wary, I mean, because we have been going down and all these rallies have been sold, but what I do like is how we moved out of the channel and got above the 50 day moving average. So we'll see. Let's look at the Qs, the triple Qs, which is for the NASDAQ. Clearly there's a lot going on here. You know, it's in the eye of the beholder of where you wanna draw your lines and how far out or how many months, weeks, whatever, you want to draw the lines. So let me remove these older ones and we can kind of get a fresh look at things. Wanna eyeball, right? So obviously we can see the market's been going down. Now, drawing the lines are, it's sort of subjective. So here we can make it look like the S&P 500. So there's your channel right there since April last couple of months and clearly you can see the move up and outside of this channel, got above the 20 day, here's the 20 day moving average and here's the 50 day moving average. So the NASDAQ popped above both the moving average and popped above the downtrending channel, which is a really good sign. I mean, these tech stocks, which make up a lot of the NASDAQ, once they get going, this thing could power a higher and power the whole market higher. So the NASDAQ's looking pretty good here. Let's look at the Dow Jones. We use the DIA, the Diamonds as our gauge. Same thing, we can draw some lines here. We use a top here, kind of connect some other tops here, and then we, you know, you can kind of pick your spots, right? Just kind of draw the line. Couple months worth is a good look back period. People ask me, how far back should I draw these lines? You know, I'd say at least three months on a daily basis just to give you a visual of where the market's been going. So here as well this week, the Dow was moving up and outside of the channel, got above the 50 day, got above the 20 day. So things are hopeful right now I'd say is the best way to look at it for the market. If we can continue on this trajectory, then we've got some serious bullish momentum happening, even in the face of those horrible news items. We're right in the midst of earning season, Q2 earning season is in full swing. A lot of the big names have announced. We're gonna take a look at some of those names as well today. And if those numbers are not as horrible as people were thinking, that's gonna drive stocks higher as well. So let's first look at Tesla because Tesla was a big one this week. This week started off with some of the big names and then the next few weeks we'll have the rest of the biggies coming out. So here's Tesla. If you've been watching these videos over the last few weeks, you've known that I've talked about the $700 level on Tesla. You can see the markets moved up and down, up and down above and below this baseline $700 level. And you can see I sort of had this channel here, but this week you could have dialed it in even further. Right here we have a congestion pattern triangle right there, which is when a stock or index starts to get in a tighter and tighter range, smaller daily moves each day, and then it eventually is gonna snap out of it and bust through one side or the other. So you can see the congestion. I mean, everyone knew that Tesla's earnings were coming up and no one was really ready to make a decision on which way they wanted to lean until after earnings came out. And once it powers through, it really powers through in one direction. So you can see here in the last two days, Tesla rallied almost 100 points just in two days alone. So a lot of people ask me, well, is there a way that I can play these earnings? Like when you get a huge move like this, how could I capitalize on that? And I always say earnings is a crapshoot. I mean, the stocks can move either way. I don't really play earnings that much because you can get really good earnings and the stock will drop or you get really bad earnings and the stock pops. It's a crapshoot. But in cases like this where the ranges get real tight, option premiums tend to come in a little bit, get cheaper, although when people know earnings are coming out, the option prices tend to get wider as well. So it's really hard to know whether you're getting good value or not. I mean, you could look at implied volatility numbers, but anyway, the only way to really capitalize on this, if you wanna have a defined risk is to buy an option straddle. And that's when you buy both a put option and a call option at the same time for same expiration, same strike, that no matter which way the stock moves, you could win. If you buy a call and the stock goes up, you can make money. If the stock drops and you've bought the put option as well, then you could make money. But it all depends on how far the stock is going to move because straddles aren't cheap. You have to pay for both the put and the call. So here's a, let me show you what we can look at here to help you gauge what could help you. Let me pull up this website here. So this is marketcamillion.com. Let me show you the website here. Marketcamillion.com is a great website for information about, you know, you look along the side here, it's got some good information. But what I like to keep open is the earnings page that will show you number one, when earnings are coming out. So Tesla just had its earnings on July 20th, so Wednesday this week, this past week. And the next earnings are slated somewhere between October 19th and October 24th, 2022. But what's good about Marketcamillion is it'll tell you what this column right here implied straddle meaning the price of the straddle will tell you how much movement the option market makers are expecting once earnings are announced. So in this case, the option, the straddle was projecting that Tesla could move either 6.1% higher or 6.1% lower than where it closed for trading right before earnings were announced. And then it shows you what actually happened afterwards. So here, the straddle was implying a 6.1% move above or below where Tesla closed that day before earnings. And here, in actuality, it went up, it moved almost 10%. It's not telling you which direction the stock's gonna move, it's just telling you it could move higher or lower by this amount. And in actuality, it moved by almost 10%. Well, what does that look like on the chart? So let's pull up Tesla again here. So before earnings were announced, this bar right here, so Tesla closed at, let me move myself here for a second. This bar, Tesla closed at $742.50. Okay, so let me just use my calculator here for a second. So $742 times 6.1% is $45.26. So what the option market is telling us that Tesla has the chance to move $45 either above or below where it closed on Tuesday, on Wednesday, they announced after the close on Wednesday. So Tesla closed at $742. The market's predicting a $45 move higher or lower. And so what you see here, Tesla actually rallied, here's Thursday and here's Friday. It rallied almost up to $850. So it rallied almost $100 a share since earnings. That's a big move and it's bigger than the market had expected. So if you had bought the straddle, let's just say the 745 straddle, meaning you buy the 740 puts and the 740 calls or the 745 puts and the 745 calls, whichever one you decided. And let's just say that straddle cost $45, $22.50 for the call and $22.50 for the put or some two numbers that would add up to $45. So as long as Tesla rallied more than $45 in either direction, either rallied or fell more than $45 in either direction, you would make money. So since Tesla went from $742 all the way up to, on the high here, $842, you'd make $40 per contract per straddle. That's $4,000. So in some cases, buying a straddle can work, but in a lot of cases, it doesn't work, meaning the stock doesn't move far enough in either direction for you to be able to sell those options for a profit. Now let's just say Tesla closed at 742 that day and it only went up to $750. That's only an $8 move. You paid $45. That would be a $37 per contract loss. That'd be $3,700 depending on how many straddles you bought. That's just for one straddle. So you have to be somewhat confident that you think the stock's gonna make a huge move and having this congestion pattern sort of helped in that case because it was storing up all this energy. So we knew that the move would be strong. It just didn't know which direction. So if you had the balls to pay out $45, which is $4,500 just for one straddle, and you were rewarded. So that's how you can make some money on earnings, but I think over the long run, you'll lose more than you win, but I don't have hard statistics on that. That's just for me and my past experience knowing that it just didn't work out enough times. So, but use that market chameleon. It's actually a pretty good website to look at some of that data. All right, so that's Tesla. So now Tesla has moved out of this range now and has gotten above, this channel here has gotten out of the congestion pattern. So it looks like Tesla may be ready to, make a new pattern here, a new move. It had been down in this downtrend, hit a high of above almost $1,250 before the split. They split recently. So that's Tesla. Let's look at some other stocks here. Snapchat was a big one yesterday. They had earnings after the close. Now you can see Snapchat, Snapchat. I'm not sure what I said. Gap here was probably earnings, gap here. I'm not, you've got two gaps. One was down and then one was up. And then this last gap, the prior earnings, another gap down here. And then we had another gap down right here. So Snapchat closed this day at, let's see where this closed. Let me move myself here. So it closed on Thursday at $16.35 right here. And what happened? It dropped, it just fell below $10 a share. So that's over a $6 move. So let's see, six divided by 16, 30, whatever it was. You know, that's about a 37% move. 37% move. Let's go back to market chameleon and see what they had, what the straddle was implying the day before earnings, which was right here. They had an 18% move baked into the options to the straddle price and right there. So there was the initial move was, it says negative. That means the market fell. So it went down 39%. If it went up, you'd see a positive sign. So you can see here, 58.8% on that back in February. So sometimes the market, I mean, they have no idea how the stock's gonna move too. So if you bought the straddle here, you made money also, because it moved more than what the market was projecting. So I don't know, maybe start looking at the buying some straddles. So this is Snapchat. But anyway, if you were long, you have shares of Snapchat or you bought calls, it was not a good day today for you. Let's see what other stocks. So let's go through some of our usual stocks. Let's look at AMD. I've got a lot of lines here on AMD. I'm long AMD. We just taken some profits on AMD in our newsletter. We sell puts. So we like when the market goes up. So we took some profits finally. AMD, let's, you know, here's some previous support levels. These lines here that I drew here. And here is the overall downtrend you can see, starting to move back up. I'm hoping that we can continue that move up. But, you know, it's still in this downtrend. We can extend this line. Let's remove and redraw. We can go all the way down, connect the tops here. Some of the tops, doesn't have to be exact. So it's still contained in this downtrend. It could, AMD could move up to the top edge and maybe get knocked back down or it could blast through. That's yet to be seen right now. So it's still sort of in limbo. Let's look at Apple. So obviously I had this channel here drawn maybe a couple of weeks ago. I can't remember when I drew it. So it was in the downtrend. Now it's in the up channel, which is nice. We like to see that. We like to see stocks in the up channel. Let's extend this thing a little bit more. Okay, so we go from here. Okay, start connecting the tops and we'll redraw the bottom one too. It helps with the visual because then you'll know like where the bounces and drops might occur from. So we're getting to the top edge of the channel. It could fall back and then bounce and then go up again, bounce, go up again. So that's the direction that Apple is in. You can kind of see the V shape here. All right, so Apple may be leading the market right now. That's a good thing. Disney. I always bring up Disney. So what I like about Disney here, it had fallen through the $100 level. The line right here went through it, found some support and has now gone back up through 100 and has moved above both the 20 day and the 50 day moving averages. So that's a good sign. Like to see Disney start to move up. Now the 100 level could be support again. If it falls back down, could bounce and start to go higher. You know, before it bounced a number of times, before it went through. So I'm hoping that it will hold, if it does fall back, I'm hoping that it will hold at the 100 level and then bounce. Yet to be seen Walmart. I like Walmart. Bought some down here in the low 120s. As I like to say, and I like to do a nibble and these down moves and these down trends, if you're in for the long haul, as we know the stock market is the greatest wealth generator of all time. If you're in it for the long run, you buy on the dips. As hard as that may be at the time, you gotta nibble on the way down, on these quality stocks because eventually, eventually they'll turn around and go higher. You can't keep good companies down. They're still producing products. People are buying those products and the company's producing earnings. Better earnings quarter after quarter, the stock price has to go up. Okay, so that's how the stock market works. Walmart, I know it's gonna go up over time along with the other stocks that I trade. Nike, another stalwart, still sort of in the downtrend though, okay? But it's bumping up against this top edge here. Could it blast through or will it get knocked back down? I think next week is gonna be telling. What other stocks do we have? Let's go through the list. Oh, Netflix, let's talk about Netflix because they had earnings this week. We sold some put spreads on Netflix, bullish strategy. Unfortunately, it moved pretty quickly so not all of our members could get in but some were able to get in. Netflix, they didn't lose as many customers as was predicted, which I guess is a good thing. They're losing customers but not as many as analysts thought so that helped bump the price up. So Netflix, maybe they're finally on their trajectory hire, found the support just above $150 but had a good week this week. Rallied a good $60 a share right here. So Netflix might be getting its mojo back. See what else we have, that's worth looking at. Microsoft's still in this downtrend. I mean, you'll have the drops goes up, drops goes up. You know, that doesn't do much for anyone unless you're playing the shorter term, these swings. That's, you know, that's hard for me. I don't really play the short run like that. So Microsoft, you can clearly see is in this downtrend but it has the run-ups. It's got the 20 day and 50 day just sitting right on top of each other right here. That just means there's a lot of indecision. Not really sure what it wants to do. That's Microsoft, Intel, you know. Oracle, we're still holding our Oracle put sell. Getting ready to take profits on that one pretty soon. Let's see, Cisco, Procter and Gamble. Disney we looked at. So the healthcare stocks still going strong. Lily, Bristol Myers, Pfizer, Merck, still hanging in there. So Kellogg, oh, what I want to see Verizon. Verizon and AT&T, the two biggest carriers, not a good last couple of days. Look at this move in Verizon. I've been wanting to get into Verizon for so long and it just, the right time has not been right. And I'm glad we didn't because another drop. And let's go back to the long-term chart here. Let's go back to the monthly. So here's a monthly chart. So Verizon sitting right on the 200 month moving average. That's the Mac Daddy of moving averages. That's the biggie. Will this be the area where it bounces? The last time it hit the 200 day moving average was in 2015, fell just slightly below it but bounced back good. Well, we bounce from here. And when you look at the daily, this would be a really scary time to buy for sure. Our size getting oversold too. So I may consider nibbling a little bit on some Verizon shares, we'll see. But this move was tough. Let's see what AT&T look like. Same thing. They had a earnings obviously but not looking as bad as Verizon but I like Verizon better. So I may have to start looking at some Verizon shares too. PayPal starting to maybe get some mojo here has gotten above the 50 day and the 20 day moving average. Open this up a little so you can see it. Still in the downtrend, this little recent downtrend but it may be popping outside, maybe getting above it. So keep an eye on PayPal. Square, let's look real quick. Partner in crime, PayPal and Square. So it kind of like a little bit of this sort of rounded bottom here, gotten above the 50 day, just popping above it a little bit. So keep an eye on PayPal Square. There could be a turning point for them. Costco still doing well. Here's Warren Buffett. I talk about it a lot, also in the downtrend but it's had this little move up higher. It's got this 50 day, maybe gonna have some resistance above it. I still have my report that I wrote on my website, the Warren Buffett book. You can take a look on our website. It's under the shop heading option strategy that I wrote to piggyback Warren Buffett for really pennies on the dollar. Here's Metta down today in conjunction with Snap, down almost $14. I think that's about it. These stocks that I have down here don't really pay too much attention to the Bitcoin stocks. Clorox starting to get some mojo, Colgate. Oh, Coca-Cola, always gotta talk about Coca-Cola. Clearly in the longterm, upward trajectory. It's pulling back 200 day moving average right here. I missed the last time for our newsletter to get in, bought some shares but maybe it'll pull back again to the up sloping 200 day moving average. If it connects here and then bounces, it could be the next good timing play to get in on some bullish plays. So we may look to sell some put options there, depending on when earnings comes out. So let me take a quick look, see when earnings comes out. Go to market chameleon. So the 26th of July, so that's Tuesday. Keep an eye on Coca-Cola for Tuesday. All right, I think that's about it here for the stock list. Go back to the SPY real quick. I liked the, of course, how it popped out and above the downtrending channel, got above the moving averages as well. So keep an eye for next week. Maybe we get some momentum to keep it going. All right, let's quickly go to our website. Once again, smartoptionseller.com, putsellingbasics right here. Get your free copy of the report that I wrote, the ebook. Talk to you all about putselling basics. Put your name, email address in here. We'll send you an email with the link to download the ebook. That's how it works. Okay, what else we do? We have our services, we have our two newsletters, selling naked puts, selling naked puts, selling put option credit spreads and our coaching services. If you wanna look for the Warren Buffett book under the More tab, click on the shop here. It'll be there. All right, you can use our probability calculator for free if you know how to use that. All right, so that's it for me today. I hope everyone has a good weekend. I will be gone the next two weekends. I won't be here to make videos, so I'll catch everyone in a couple of weeks. Wishing everyone good trading week ahead, trading weeks ahead and I'll see y'all in a few weeks. All right, this is Lee Lowell signing off.