In our After Hours with Option Addict sessions, I’ve been trying to explain how growth stocks are all interconnected in terms of market sentiment. We’ve categorized stocks into a 1-5 rating system and illustrated how quality stocks like INTC, MSFT, IBM have been rallying though all this market activity. We looked at momentum stocks (2′s) like BIDU, AAPL, AMZN and how well they’ve traded lately. Then we dialed into growth stocks (3′s) and looked at dozens of non correlated stocks, like DANG, FEYE, TWTR, TRLA, CSIQ….and showed how the charts are identical, despite the fact that the companies, fundamentals, and valuations are not.
I’ve been saying for weeks that this is a market set-up “specifically for the 3′s.” The same stocks Janet Yellen called into question. As of this moment, these stocks are leading the market here, leaving their multi-week ranges. Should they go, it will trigger a move from price acceptance, into price discovery mode. Since exposure to these stocks was reduced earlier this year, this could create a chase, which you are all familiar with.
On the day, I booked SCTY calls, took a position in FSLR calls for tomorrow (tarriff ruling). Still want X calls for earnings and GOGO.