Weekly Market UpdateJuly 19, 2021

This Update• Our week last week • The market this week • Earnings/other announcements • Our week ahead • Trend: The pandemic

Last Week• We began Income Madness - I will review where we stand in today's session at noon ET

• We rolled our calls - AAPL (LEAP call spread), KBH (buy-write), KRE (assigned) and WSM (buy-write)

• We rolled PTON bull put spread with a net debit • Capital allocated = $30,837 • Net cash = $326 • Cash rate of return = 1.1%

We took a loss on QS - I track this as a hit on our capital and these results are not included in the way I

track cash rates of return

I will do the same on a buy/write where the underlying shares appreciate in value

The Market This Week

Why The Sell-off?• COVID-19 is surging among the unvaccinated • The market is concerned about the impact on economic activity in the U.S. and the world

• Recognition there is no “new normal" until the world is vaccinated

• Will economic bears beat bond market bulls?

Is it time to hedge?

The key number on the S&P 500 is 4,200

A decision on hedging later in the week

The Market's Tug of War• COVID-19 = economic growth less than previously anticipated

• Slower growth = lower interest rates • Which set of traders wins? • Is it the "risk-off" bears or the "risk-on" bulls?

Is it the risk-off bears or the risk-on bulls?

Is it the economic growth bears or the interest rate bulls?

Earnings Today• AutoNation (AN) • Cal-Maine Foods (CALM) • Tractor Supply (TSCO)

Earnings Tuesday• Chipotle Mexican Grill (CMG)• Interactive Brokers (IBKR) • Netflix (NFLX) • United Airlines (UAL)

Earnings Wednesday• ASML Holding (ASML) • Discover Financial Services (DFS) • Las Vegas Sands (LVS) • Texas Instruments (TXN) • Verizon (VZ) • Whirlpool (WHR)

Earnings Thursday• American Airlines (AAL) • AT&T (T) • Blackstone (BX) • Capital One (COF) • Crocs (CROX) • D.R. Horton (DHI)

• Danaher (DHR) • Intel (INTC) • Quest Diagnostics (DGX) • Skechers (SKX) • Southwest Airlines (LUV) • Twitter (TWTR)

Earnings Friday• American Express (AXP)

Trading Earnings• We trade after earnings announcements • We trade when there is clarity on the movement in the stock

• In the coming weeks, be on the lookout for new positions recommended via email alerts, not just via live trading sessions

Our Week Ahead• Three days of Income Madness left • We may be rolling a good many positions • We may end up with capital allocations in Income Madness for one contract greater than $50,000

• Potential new trades after Thursday's earnings announcements may come out via alert on Friday

The Trend: COVID-19• Vaccine hesitancy hitting developed nations • Vaccine hesitancy hitting select regions of U.S. • 99%+ of all deaths from COVID-19 are unvaccinated people

• Scientific/medical fear is rapid; spread will lead to further mutations that undermine current vaccines

• The market sell-off this morning is about COVID

What Could Happen?• Selective local mask and social distancing mandates

• Hits to tourism and travel • Hits to labor market if schools close in certain areas

• Less economic impact than potential market impact

COVID Trend = Stock Picking• Previous pandemic winners may benefit • Key: "may" • We will focus on pre- and post-pandemic winners

• 3 cocoons discussed last week: Home, Digital, Personal

• Pets • Streaming

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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.