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Morning Brief: BBBY Sells Off, Another Cat Bounce?

With August trading coming to a close and Labor Day creating a 4 day trading week next day, the market seems poised for another cat bounce, and could sink again for a 4th consecutive down day after the Fed meeting. Labor reports showed more job openings, which caused continued fears that the Fed will continue 75 bps rate hikes through the end of 2022.

HOUSING MARKET: The first wave of mortgage company bankruptcies hit this summer , causing more concerns that a steep fall of the housing market will follow, similar to the 2007-08 crash. Big mortgages companies are buying out their competition, as they try to scoop up market share.


#BBBY: Dropped 22% in pre-market as strategic guidance was disappointing. The drop comes after a huge rally and I closed my position yesterday as weakness continued to hit the stock. The drop could cause more meme traders to hop on the band wagon, as call sweeps for SEPT expo, continue to come out at the $22 strike level.

#AAPL: Following all tech, the stock was down over 2% yesterday , crossing VWAP and ~160 support, before bouncing back to the support zone before market close. Tech will struggle as rates increasing, as borrowing and carrying cash become more costly .

#TSLA : Also crossed VWAP and the support zone, falling to the 170 crash zone. I continued to add on shorts and credit spreads, selling 150 strike puts at the low and closing my sold calls on the down swing. I will continue to play around the trading zone , as my positions give me 20 point price swings to trade around.

#CMG: Dropped below the $1,600 price point, before gathering momentum into close. I have 100 point swing points as I continue to squeeze the stock as the VIX is settling out and a trading zone is reached. I am looking for quick pivots into credit spreads if there is a large sigma move, but liquidity is an issue for trading options on this stock.

Overall, there seems to be a lot of HFT off of VWAP, as hedgies and professional traders hammer down the market, capitalizing on retail investors trying to go long into the market. There are a lot of pain price points they are hitting, and short selling has continued to increase on meme stocks.


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