2024年7月11日星期四

July 11, 2024 | Read Online

Traders have been waiting all year for rate cuts, and it finally looks like it will happen.

But to the surprise of some, the markets got SMASHED.

You see, the stock market is always forward looking…

The indices rallied off the back of the AI hype…

It drove companies like Apple, Microsoft, Nvidia, Alphabet, Amazon, and Meta Platforms into the exclusive trillion-dollar market cap club.

But with inflation cooling off, and many of these companies trading near their all-time highs…

It's time for a good-old fashion rotation.

And that's exactly what we saw today, with the Russell 2000 leading the way.

Not only were small caps hot…but dare I say we saw "a dash for trash."

In fact, I pointed these stocks out yesterday in the TheoTrade Live Member Chat.

Despite the Nasdaq getting roughed up today…

We saw buyers in names that have received no love this year like:

Lululemon, Nike, Starbucks, Deere & Co., and McDonalds.

Heck, even Walgreens was up slightly.

Now, one day alone doesn't make a trend.

And of course, with earnings season upon us, things can change quickly.

But it looks like tech is finally falling out of favor.

Which Stocks Should We Buy?

For me, it always starts with the options market.

I want to see constructive options flow.

For example, take a look at Starbucks options activity from 3 PM ET.

40% of the call activity was from traders hitting the ask, and paying up for calls.

In addition, 40% of the put volume was from traders hitting the bid.

These are both bullish signs.

Again, one day doesn't make a trend…but this is the kind of stuff you want to be watching.

Where is the money flowing, and how are the big players positioning.

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