If you were an Asset Manager, which stocks would you want in your portfolio at year end?

PRE-OPEN MARKET COMMENTS THURSDAY – The market dropped and bounced because of the shutdown and its end. Today Trump signed the funding bill that will reopen the government. This turmoil is not a good look for the country and this could lead to future credit downgrades.

In two months, we will go through this again. Both sides are miles apart on healthcare and this is not going to get resolved with two holidays between the next deadline.

CSCO reported strong earnings and NVDA reports next week. The tech giants have seen recent weakness and I believe they are poised to rally into year end. Investors will want to open their year end statements and see some exposure to the next big thing – AI. Those who believe that a tech bubble is brewing are already on the sidelines and they won’t care.

Retailers will also start reporting next week. I just clicked on a news report on CNBC’s site that claimed that half of holiday shoppers were going to use “buy now and pay later” programs. That’s a scary statistic and I wanted to see the source they were using. It was a f____ing ad for lower interest rate alternatives disguised as a news story. What a bunch of garbage.

I don’t doubt the statistic, it’s just taints their already tarnished research as far as I’m concerned. The job scene is not good and the BLS is not likely to ever report the numbers for October. Who knows how reliable the November numbers will be.

This morning Michael Burry announced that he is closing Scion Asset Management and he is “on to much better things”. That’s another way of saying that he shorted some of the strongest stocks in the market and he got his ass kicked. Trust what you see, not what you think. I’ve seen this movie so many times in the last 30 years. He could ultimately be right, but he needed to wait for a technical breakdown.

I like mega cap tech stocks that have dropped and that are forming support. I believe that they will bounce into year end. If you are mildly bullish, sell out of the money puts. If you are bullish, go closer to the money. I prefer this strategy to buying ITM calls in January because I don’t know how much higher the market will go. Selling puts takes advantage of time decay if the stocks just tread water. The momentum has stalled and I am not seeing the technical patterns that suggest year end strength. I believe we are going to limp across the finish line and $SPY $700 is attainable, but it will be a struggle. We are likely to reach it on a light volume rally.

For day trading, I will wait patiently for this early dip to find support. As long as the low for the day is above the prior day’s low, I am in buying mode. We will test it right on the open today. When support starts to form, I am expecting a move to the prior day’s high. If we take out the low from Wednesday this morning, I will put my wallet back in my pocket. I am seeing good longs and shorts for day trading and there has been decent sector rotation. Banks and healthcare have been strong and tech, crypto and AI have been weak. You can trade either side.

Support and resistance are the range from Wednesday. The next support level is $679.