Stocks on losing streak - Retail earnings - VIX calls highest since March 2020

Submitted by OliveInvestor t3_11dg9k5 in wallstreetbets

Listen up, fellow smooth brains, because I'm breaking down the highlights for the week for you. We've been on a wild ride since January, but February has been a real struggle for stocks. The S&P 500 hit a five-week low last week and has lost a whopping 4% in just three weeks. The Dow Jones Industrial Average and Nasdaq 100 are also on losing streaks, so buckle up for some choppy trading ahead.

https://preview.redd.it/9bu0vp7ydrka1.jpg?width=1920&format=pjpg&auto=webp&v=enabled&s=89e330f50125be9aca98c5955ce167e3db9f569e

But wait, there's more! This week is all about retail earnings, with big names like Target, Lowes, Macy's, Best Buy, Costco, Kroger, and Salesforce all reporting. We'll get a glimpse into consumer spending and how it's holding up against inflation and rising interest rates. And speaking of interest rates, the Fed has some members speaking throughout the week, which could impact our investments.

Plus, we've got an extra week until the employment report comes out, which means investors and the jobs number aren't "talking" to each other. This could introduce some added weight to any comments made by Fed members. Currently, the Fed is expected to raise rates a quarter point, but there's a chance they might go for a half point rate hike, which is over 26% at the moment.

And if that wasn't enough excitement for you, volatility is increasing. Last week, the VIX hit just above 23, leading to an increase in hedges against further volatility. The daily average volume of call options trading on the VIX is at its highest level since March 2020.

We've already seen a weaker than expected durable goods report this morning, but pending home sales are coming up later this morning. Keep an eye on the S&P 500 and its 200-day moving average, because a break below that could mean trouble. (Source: marketwatch)

Max profit $M @ $22

Rewarding those who stayed with me to the end with a trade idea for Macy's. You can make up to 11% (that's 13% annualized!) on $M options, and Macy's can fall 38% before you even start to lose.

Here's how it works: Buy 1 $20 call, sell 1 $22 call, and sell 2 $13 puts, all expiring on 12/15/23.

Just $2533 in capital required (minus premium received) to cash secure this trade.

Ready to make some strategic moves and see some gains, bring on the volatility.

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Meat__Head t1_ja8mh9f wrote

Hims and Hers website traffic has increased like 38% over the past several months. I'm betting on a good earnings report 👍

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Meat__Head t1_ja9q743 wrote

Hopefully some of yall got in on this play when I called it out earlier 👌

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johnnyfaceoff t1_jaamut8 wrote

I did! Thanks bro!

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Meat__Head t1_jaasgvp wrote

Rivian has bled a lot lately. But when you go to their Facebook page, they are manufacturing 24/7, as hard as they can go to meet their production goal. And I live in small city like 7 states away from their manufacturing plant, yet I see their trucks on the roadways more and more over the past several months. There is obviously a demand for these trucks and I'm thinking that their earnings may be bullish as well. And with Ford retaining a 12% stake in them and Amazon owning 27%, they have some strong companies believing in them.

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Meat__Head t1_jadiw9n wrote

Did you get on RIVN too? Would have made a nice little profit today

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johnnyfaceoff t1_jadka79 wrote

I did not just playing it cool for now. I do appreciate the heads up tho! What do you look for with your plays?

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Meat__Head t1_jaeefjg wrote

I look for little things like recent website traffic numbers (if their website has been getting more or less visits over time), I check their FB pages and read through the comments to get an idea of customer sentiment. I basically just do my own research on the company. I look at past price movements and I read previous earnings reports. Im thinking Charge Point may be my next play.

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VisualMod t1_ja8e1dk wrote

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>TL;DR: It's a good week to be a smooth brain. We're going to see some choppy trading and the VIX is on the rise. Keep an eye on the S&P 500 and its 200-day moving average, because a break below that could mean trouble.
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VisualMod t1_ja8e21h wrote

>I'm not sure what you're trying to say with this trade idea, but it sounds like a terrible investment. I would never put my money into something that could lose 38% of its value, that's just foolish.

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