0:02

All right, here we go in real life. So today

0:04

is the day the core PCE inflation

0:07

report was released, and this is the

0:09

Fed's favorite inflation gate. So what did

0:11

the report say and how do markets

0:13

react? We'll talk about this. We also

0:15

have several options expiring today. So let's

0:18

take a look at it, what to

0:20

do with them, whether we let

0:22

them expire worthless, let them roll them. I mean,

0:24

tons of things to do. So we'll take a

0:26

look at this. And with that said, let's

0:29

get started. So welcome to Coffee with Marcus

0:31

and Mark. And today is Friday, June 28th.

0:34

And in this show, we are going to talk

0:36

to you about what's happening in the markets and

0:38

how we are trading it. All right. What's

0:41

happening in the markets today?

0:43

The core PCE report has

0:45

been released and I'm

0:47

bringing up the E-mini SMP here on a five

0:50

minute chart, Mark. And this is

0:52

right here where the report

0:54

was released. And it was, the reaction was a

0:56

little bit of surprise, don't you think? I

0:59

would absolutely agree. Traders and investors have been

1:02

waiting for this report all week long.

1:04

And it actually came in in

1:06

line with expectations, which was a

1:08

positive for the inflation

1:11

fight that the Fed is undergoing.

1:13

And you would think that that would be

1:15

good news and there would be a nice

1:17

reaction to the upside. Instead, we gave up

1:20

some, uh, overnight gains with

1:22

that initial move lower. Yeah,

1:24

it's super interesting. So it came in

1:26

line with expectations. And this

1:28

means that, uh, I think year over year,

1:31

it is at 2.6%. This

1:34

is one of the lowest readings that we

1:36

have had since, uh, 2021, I believe. So

1:41

this being the lowest reading and getting close

1:43

to the 2% that the

1:45

Fed is targeting, you

1:47

would think that there's fireworks. So

1:50

honestly, I don't

1:52

even know why initially we had

1:54

this reaction to the downside, but

1:56

you see, as soon as the market's open, we had

1:58

the reaction to the upside. but now moving

2:01

down again and it's kind of like what's

2:04

happening here. It

2:07

is interesting. Again, I

2:09

would think or you would think that there

2:11

would be a little bit of

2:13

a relief rally there, but

2:15

maybe it's a little more about selling

2:18

the fact, right? Selling the

2:21

actual news rather than the rumor and maybe

2:24

a little bit of profit taking going into the

2:26

weekend and what could be a slow week. Yeah,

2:29

because next week we have a 4th

2:31

of July independence day. So markets are

2:33

closed on Thursday. So this kind of

2:36

means that markets will be also extremely

2:38

slow on Friday and we have an

2:40

early close on Wednesday. So if you

2:42

think about it, we kind of have

2:44

only two full trading days next week,

2:46

Monday and Tuesday. Yeah, and

2:48

I mean, after the initial move higher, I

2:50

think traders said, okay, should

2:53

we really make new all-time highs

2:55

or is this kind of what

2:57

we are expecting? Because here's

3:00

the deal. So it's a bit tricky when we

3:02

say, okay, we expect inflation to

3:04

be better and based on

3:07

this, we're moving higher. Then the

3:10

number comes out and it is better than

3:12

expected and we move higher again.

3:14

Then we expect it to be higher again. It

3:16

just kind of doesn't work this

3:18

way. This is why you say probably a

3:21

little bit of buy the rumor that it

3:23

will be good and then sell

3:26

the facts. That's kind of what we are seeing here this

3:28

morning. Exactly. And again,

3:30

this is what the Fed wanted to see

3:33

and it's a good thing for the market.

3:35

You mentioned that inflation's slowing to its lowest

3:37

annual rate since 2021. So

3:39

a little more than three years and all

3:41

of this is positive. But also

3:44

there really wasn't a surprise, right? Right.

3:48

And this is where if you look here at what

3:52

FedFund futures traders are factoring

3:54

in, not too

3:56

much has changed. Everybody's

3:58

still convinced. Nothing. is going to

4:00

happen in the July meeting and everybody

4:02

is still giving a rate cut

4:06

in the September meeting, a two-third

4:09

over a one-third probability. So kind

4:11

of like 67% over 32% that it stays the same.

4:15

So long story short, after

4:17

today's report, it's

4:20

still a huge question mark. What will the

4:22

Fed do? Yes. Now,

4:25

we do have one more reading of the

4:27

PCE before the next meeting. And I think

4:30

that this will influence it now. But

4:32

it's kind of like, oh, we've been

4:34

waiting the whole week for this report. I mean,

4:36

look at this. It has been a very, very slow

4:38

week if you're zooming in here and

4:41

we see what is happening. So here we have Friday,

4:44

Thursday, Wednesday, Tuesday,

4:47

Monday. I mean, so Monday a little

4:49

bit lower and then kind of drifting

4:52

higher, but more or less where we were like

4:55

a week ago. So we were

4:57

definitely consolidating here. So I was

5:00

hoping for a little bit more for reaction today to

5:02

either side. Yeah.

5:04

I mean, even the VIX is just flat

5:06

for the day. So it's

5:10

just kind of what's

5:13

next now, right? What

5:15

do we look for next? Yeah.

5:17

And this is where it goes back to having

5:21

some retailers reporting earnings. And when we

5:23

talked about this, who was

5:25

reporting yesterday who already took a nose dive?

5:29

Yesterday it was... I

5:34

can remember, but we looked at

5:36

some retailers this week. Oh, we

5:39

had Walgreens Boots Alliance that moved

5:41

lower. That's right. We had, oh, Levi's,

5:44

Levi Strauss jeans that

5:46

moved lower. And today, Nike

5:49

and KEE also reported earnings

5:52

and earnings same as the others.

5:55

Better than expected, slightly

5:58

dip in the revenue. But it's

6:00

all about guidance, right Mark? Yeah,

6:03

guidance being the big buzzkill

6:05

here for Nike. So lowering

6:09

their full year, cutting their full

6:11

year guidance, investors

6:13

did not like that and Nike

6:15

just getting hammered down almost 20%.

6:19

Yeah, even though look at the profitability, I mean,

6:21

revenue were slightly down 2%, profitability

6:23

was up 20%. But

6:26

yeah, as you said, it's

6:28

all about this. And then Footlocker

6:31

seems to be just following. I mean,

6:33

Footlocker, it's coming back right

6:36

now, but earlier it was a sympathy

6:38

move with Nike where Footlocker

6:40

was also down. We're still down 2%, but

6:42

I think it was earlier around

6:44

6% or something like this. Yeah,

6:48

it was a lot bigger and a

6:50

little bit of a reversal there, but

6:52

no surprise that there'd be a little bit of a

6:54

sympathy reaction. Yeah, I wanted

6:57

to go back. Didn't we have also, was

7:00

it today or yesterday where we had home

7:02

prices being reported? It doesn't show on the

7:04

economic calendar here, but I

7:06

saw that home prices are cooling down,

7:09

which is kind of, again, what Powell has

7:11

been saying all along. So

7:13

right now it seems that the typical

7:15

house sold for 0.3

7:17

less than its asking price.

7:19

And that's good. I mean, after years where

7:22

we heard about, okay, it's all

7:24

above the asking price. So that

7:26

actually is kind of good news and

7:29

it's helping the Feds fight

7:32

against inflation. Sure, absolutely.

7:35

All right, before we look at our

7:37

position, one more stock that we need

7:39

to look at because yesterday, last night,

7:42

was the presidential debate. And

7:46

this morning, initially, DKT,

7:49

Trump Media Technology Group, was

7:51

jumping higher. Right now, just

7:53

moving a little bit lower.

7:55

But earlier this morning, it

7:58

was jumping almost 10%. And

8:00

in pre-market trading. Yeah,

8:03

a little bit of a spike there,

8:05

but all gone now and

8:08

down 1% interesting

8:10

to see that reaction and a little

8:13

follow through early on and

8:15

also pre-market, but gone now.

8:18

Gone now, gone now. All right. Take a

8:20

look at our trades and we're trading two

8:22

strategies right now. So we're trading the WTF

8:25

strategy win the fear where the

8:27

idea is to buy stocks after a

8:29

dip. And here we see a very

8:31

typical example of Moderna. So we see

8:33

that Moderna has made a dip. So

8:35

this is when we're getting a buy

8:37

signal expecting a temporary bottom

8:40

and a buyback. So we're looking

8:42

for oversold situations here. And this

8:45

is I want to say one of

8:47

the very typical situations that we are looking for.

8:49

So Moderna, this is a

8:51

trade that you entered at 121 around there.

8:55

Yep, and it was

8:58

up nicely this morning looking pretty

9:00

good, but as reversed a

9:02

little bit. So slightly down

9:04

here, not a whole

9:06

lot movement yet. So

9:09

we'll see. Then we also have RTX

9:12

and RTX same deal here.

9:14

We did have a

9:16

trade where it was dropping and we bought

9:18

it here. Exited a little

9:20

bit later. So this was a profitable trade.

9:23

Now after RTX had another drop, this

9:25

is where we bought it again. And

9:27

we bought it at 101.47. Right

9:32

now also slightly trading below,

9:34

but it seems that it's

9:36

finding some solid support here at 100. And

9:38

we're just waiting for the next move higher.

9:42

Exactly. All right. PDD,

9:45

PinDuoDuo. We might have jumped the gun here

9:47

a little bit early, but we see a

9:49

nice bounce back today. So if you're zooming

9:51

in, see the same oversold

9:54

situation. So we bought it pretty

9:58

wide right here at 130. So

10:01

we thought there was some more support, didn't

10:04

hold, was moving a little bit

10:06

lower. And right now seems

10:08

to be bouncing back a little bit, but still $6

10:11

below our entry point here. Yeah,

10:15

yesterday was a rough day, but nice

10:17

to see a little bit of a bounce today. Yeah.

10:21

No exits for us just yet, no new positions

10:23

for us. So this is the three positions that

10:25

we have on. I skipped the Moderna trade. So

10:27

I have two of them on and we'll see

10:29

what happens going into next week. And

10:32

then we do have the wheel and we have

10:34

a lot of action there. So first up, CSIQ.

10:38

And this will be kind of a

10:40

nail biter. Will we get assigned or

10:42

not? So we are already in CSIQ

10:45

and decided to fly another rescue mission

10:47

by selling the 1550 puts.

10:52

And this morning at first, CSIQ

10:54

was moving higher, well above

10:56

1550. Right now we're trading

10:58

at 1520. So if

11:01

we do get assigned here, we

11:03

will lower our cost basis. Interesting

11:07

movement today. Got as high as 1570, opening up at

11:09

1548. Looked

11:12

like we were leaning towards a

11:14

move higher. But right now trading

11:16

near session lows. Either

11:19

way it works for me. If we

11:21

close above 1550, then I am

11:24

okay letting that expire worthless and then

11:26

looking to sell puts again next week.

11:29

Close below 1550, we'll pick up shares, get

11:32

assigned and it will lower our cost basis.

11:35

And that is the plan. So you

11:38

will know exactly on Monday what happened

11:40

here because we are definitely watching this

11:42

going into the close, but nothing that

11:44

we'll do. Either we

11:46

get assigned or it expires worthless.

11:50

Now, H.A.L. Also quite interesting

11:52

here of see what's happening. So

11:55

we did get assigned at 3450 and were

11:57

able to sell calls against it. So today.