Weekly Market UpdateAugust 2, 2021

This Update• Our week last week • The market this week • Earnings/other announcements • Our week ahead • COVID futures

Last Week• The market was sloppy • Earnings = better the expected • Earnings = many companies that beat expectations saw their stocks fall

• Amazon miss a bellwether for pandemic retail stocks?

An Unusual Week• We opened and closed all three put positions • Ended the week with call and spread positions, no puts outside of Income Madness

• Capital allocation still modest

Trades Last Week• Open/close SBUX = profit of $0.56 • Open/close AMD = profit of $1.17 • Open/close CROX = profit of $1.50 • Open MCD spread = $0.46 in cash • Open MSFT spread = cost basis of $51.87 • Sold KRE call = $0.89 in cash

Income Madness Status

TSM 118.00 Aug 2

SCHW 70.00 Aug 2

• Two open positions • Still targeting 2% return • Still targeting $1,000 cash • Rolls continue to generate

cash

Open Puts and CallsStock Position

KBH Aug Monthly (8/20) 42 Call

Cost basis $45.78

WSM Aug Monthly (8/20) 165 Call

Cost basis $156.48

KRE Aug Week One (8/6) 64 Call

Cost basis $67.50

Open SpreadsStock Position

LULU Aug Monthly (8/20) 360/350 Put Spread

Net debit $0.79

PTON Aug Monthly (8/20) 110/100 Put Spread

Net debit $6.01

AAPL Sept 2022 Call (9/16/22) 120/Aug Week One (8/6) 149 Call Spread

Cost basis $33.38

MSFT Sept 2022 (9/16/22) 250/Aug Week One (8/6) 295 Call Spread

Cost basis $51.87

MCD Aug Monthly (8/20) 230/225 Put Spread

Cash in hand $0.46

It Is Again About COVID-19• COVID-19 cases surging among the unvaccinated • The delta variant is easily spread by vaccinated asymptomatic people

• Masks are the only solution at present - and that ain't happening in the U.S.

• The market is concerned about the impact on economic activity in the U.S. and the world

COVID Futures• Scattered mandates this summer • Increasing focus on the unvaccinated • Boosters around the corner • Bullish view - the market plows on • Bearish view - lockdowns ahead • My view?

No lockdowns; boosters; marked slowdown in travel and restaurants; Fed remains dovish; post-

pandemic growth spurt ends in Q4

COVID-19 and the Market• COVID-19 = slowdown in growth as seen in this week's GDP data

• Slowdown = continued dovishness by Fed despite comments about tapering of bond purchases

• Who wins?

We do! Stock pickers

The 3 Cocoons

Home Digital

Personal

Next week a deep dive on the Home Cocoon

Our Week Ahead• 3-a-week trading sessions begin • Tuesday-Wednesday-Thursday at noon • We will continue to trade post earnings • 4-6 new positions a week

The Market This Week• The earnings onslaught continues • The Fed behind us • COVID-19 ahead of us • Volatility inching up

Earnings - Monday

•TTWO

Earnings - Tuesday

•H •J •MAR •MCHP •UA •ZBH

Earnings - Wednesday

•ONEM •EA •ETSY •LNG •ROKU •WYNN

Earnings - Thursday

•BDX •BYND •EXPE • ILMN •MRNA

•NVAX •RUN •SQ •TRIP

Earnings - Friday

•BRKB •FLR •NCL

Emails• Emails reflect calm - a good thing • Concerns are about stocks/earnings, not the market

• What is the underlying market sentiment? • What size portfolio does one need to benefit from the Las Vegas event?

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HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.