Welcome back to trading 360. I'm Nicole Petallides, live on the floor of the New York Stock Exchange. So glad you are with us. It's time for the big three. Three stocks, three charts, three trades. Ben Lichtenstein will take us to the charts here to take us through the trades. Don Kauffman of Theo Trade. Great to see you both. Don, we've seen some serious selling of course. Last week we sold off in a big way. And it looks like right now, after a couple of days of selling another lagging week here, some of your thoughts? Yeah, I mean, look, right now on the week, we're we're basically massively unchanged on the week overall in terms of the S&P. But, you know the financials it's rough right now. The financials are taking a fairly substantial hit. And effectively we're seeing, you know, the broader marketplace now obviously take a hit in what is a much higher correlation. That is things are just, you know, in the S&P 500 are heavily correlated. Markets are down. Everything is basically down in accordance with that. Okay. So we have Baidu as your first name. Tell us a little bit about this story and why you like Baidu. Yeah, right now you know it's for me it's often less about the individual stock and much more about the market and Baidu and really any of the Chinese large caps. I'm looking for a bounce right now, which ironically, in even in today's down marketplace, we're seeing a little bit of a bounce inside of Baidu. Two things and two factors come into play over here. Number one, I think we're actually seeing a kind of a short term like possible bottom here at the 80 level, like a double bottom, actually come into play right around again, this 80 level in a bounce. The other aspect is I think there's anticipation already of, the, the Chinese regulators coming in and stepping in and stimulating the marketplace. As such, I'm going to take a bullish trade going out to the October 18th expiration. I'm going to be buying an 85 call, selling a 90 call. So I'm just going to do a $5 wide call spread looking for a decent bounce off that 80 level. This one's done for $1.45 debit okay. Let's see what Ben Lichtenstein has to say about the charts please. Ben you know, I think we're in a longer term downtrend here, Nicole. But I like Don's, take on potential to see some upside on the shorter term, more intermediate medium term because there has been a bit of a bottom that's been established and we are in a bit of a balance. Again, on the longer term, which lends itself to kind of random type price activity. So we could see a little bit of lift occur here. Even amidst this longer downtrend, which we'll get into in just a second. But first and foremost, Baidu on the move higher on the short term with that broader market weakness. Taking a look at shares of Bidu all the way up to $84 today, not far off that level right now, you can see we're kind of holding on to the middle of the range, I guess is the best way of looking at it in terms of what we've established so far today. Now, as we move away from that more granular look at some of the more intraday price activity and add a little bit of time on this. What we're doing here. We're going back to when the stock well if you remember it was trading all the way up around 100 105. And that's on the left side of your screen going all the way back to the middle of July. You can also see some conviction that came into play as we sold off again, a 60 minute candle chart now. So you can see big move lower from that 100 level I mentioned mid-July all the way down to lows around 79. Sideways consolidation since. So really no rejection of this lower level. And as I like to think of it, value right now which is forming right around that $85 level. So again, step away from this chart with me one more time away from the hourly candles we're going to add some time on. You can see it's not just on that short term, but on this longer term. As I mentioned, a well defined trend off the July 2023 high that was up around 157 this week. Back to near $80 to retest that year low that we saw. That's what Don's talking about in terms of this double bottom currently in balance forming value around 87. So again you've got this double bottom that occurred here. You can see it. And that's what we're trying to get a little bit of a lift off of right now. But still bouncing around 87. Still holding below 105. That retest of 105, if you remember back in July failed. That's the move that we just looked at on that hourly candle chart. That high conviction move lower and then this consolidation. So value forming at a lower level as it has and continues to be. Bears are in charge on this chart. The longer term daily candle still could see some lift again and remain within this range. But longer term here it looks like they're behind the wheel here still. Nicole Yeah. You know, when I was checking out the Chinese stocks because often people say I don't touch them, I, you know, I get nervous or I, you know, I love the Chinese stocks for opportunity. But we did see Baidu down 30%. Pinduoduo has been under pressure for the year. Baba is actually one that's doing better. Final thoughts on on Baidu Don. Yeah. You know, in terms of trusting it, look this is just an option spread. We're in we're out. We're on with our life after, you know the October 18th expiration. So this is this for me is it's an you know it's an easy shot to the upside looking for a nice bounce. But a large part of really this trade that plays into my logic though is I'm often looking for Chinese stimulus. And that is something that has played out quite considerably in, in those markets over the last couple of years when they come in and they do stimulate that marketplace, get these large caps that get a good bid under them, and that definitely makes the trade a bit more worthwhile at this point. Yeah, that makes sense. Actually. That's an interesting point. How about we get to the consumer staples, which has been running from 65 up to 84. When you look at the ETF, obviously a winner here for the year, up about 15%. Yeah. And that's exactly why I'm going to get bearish Ben Ben and I are going to get into it I think on this chart. But I'll tell you what. So I put together this trade right. Pretty much as the market was about to open. And obviously there's some sell side activity in Xlp. So consumer staples let's talk a little bit about them really. The consumer seems completely like fractured. If you look at stuff like Dollar General or Dollar Tree versus maybe Walmart and Costco, it's a tale of two totally different retail marketplaces. Nevertheless, with, you know, a quarter point rate cut, you know, in store for us, I think that's actually going to have negative implications to some of the retailers. So my trade is a bit less about some of the technicals here. And it's a lot more about the consumer is beaten down bludgeoned. Inflation has not necessarily gone away just yet. And we're probably only going to get a quarter point cut as such. Nice bearish trade here. I'm going all the way out to the December 20th expiration. I'm going to be buying the 82 puts. Selling the 77 puts. Again this is Xlp. This one is done for a 95 cent debit okay. Let's see what Ben says. Ben what do you think about the charts. So he says that's it. It's had a great run up. It needs a little pullback now. Yeah. Well it looks like it's back. And Phil it looks like it is pulling back as we speak right now right I mean this one's been coming under pressure here today to credit to Don's trade here. And I know he had this in earlier this morning as well. So it didn't just happen. But I'll also say that that $82 level I think is key. That's going to be the first indication that we're starting to lose some of the momentum to the upside. Don's right. The trend is still up. So he's trading Counter-trend. And that's why we're kind of at odds on this one. I'd like to kind of participate with the trend. Hope it continues rather than get ahead of it. Thinking okay, now it's about to change because I've had a difficulty trying to do that at multiple times. I don't have the ability to read the crystal ball as clearly, but just taking a look at some of the price activity we've seen as of recent bullish type pattern playing out migration of value to the upside, a pretty well defined bottom left top right now we are seeing some price decay come into play. It's a five minute candle chart. I have behind me and you can see how we have come off. But here's that $82 level again. And so as long as we hold above that, it sort of looks to me like this is just one larger area of consolidation that's forming, testing lower extreme of hey, take out 82 and things start to change a little bit at least on the five minute candle chart. Let's step away from that more intraday time frame. Add a little bit of time on. We're looking at an hourly candle chart here now. So we can see on a 60 minute candle 82 is significant on the five. But once you've added some time on you got to get below 7750 before you've really reversed what we've seen in terms of an uptrend, you get a really well defined area of value that form high conviction. Move up. To me, it looks more like just balance kind of forming in this area here again, 7750 kind of a line in the sand per the hourly charts. Now adding time on similar pattern bottom left top right. So this is why Don knew I wasn't going to be supportive of this short sided activity. Because most recently look at this high conviction trade. We were in a very wide range area balance that was formed. And this is value after a high conviction move up. We're talking a spring of 2020 after the pandemic. Throughout the year, most of it occurred into the beginning of 2021, went a bit more sideways 72. But this is a high conviction trade. We're seeing a bull trend with a breakout, basically what the Bulls want to see and establish a new area value at a higher level, right. Because that's solidifying the working assumption. That trend is to the upside. Nicole. Okay You know, and that's the whole thing about these trades. I mean, you try and get in and out of these pretty quickly, right? Don Yeah. No, I mean, look, this one's all the way out to December 20th. But you know, in this again, it's less about the technicals. This particular trade is much more for me about asking the big question. Why is fed cutting rates. Like why is nobody asking that question. You know they're just oh let's talk about a quarter point. Let's talk about a half point. Why are they cutting rates. Because we're heading into economic weakness. That's why the fed is actually lowering rates. And I think that that's going to have an impact obviously to the consumer. And that's, you know, consumer staples over here should take a degree of a hit, especially between now and that December expiration. Okay. Next up certainly not last but least right. Not the least Apple. What are your thoughts here. As we got the Glow Time event the new phones are out the 23rd. I think you could start to preorder them. Anyhow. Let's hear your thoughts. You know I'm I'm not lining up for this one and I am a Big Apple fan. I mean, I wear the watch, I got the phone, you know, the Mac issued underwear here, but it just look, this point, it's a little bit underwhelming. And possibly a bit overpriced, I'm just I'm not going into the new cycle, like, waiting in line for my, for my phone to, to trade it in. There's going to have to be some spectacular deals. This is not going to be a super cycle for Apple. I think people are going to realize that very, very quickly here. So we're also in a in a period of time. It's an election year. We're going to be cutting rates, the consumer is going to be a little bit destabilized. It's a little underwhelming over here. It's bearish on Apple. I'm actually going to go out to the November 15th expiration. I'm going to be buying the 210 puts selling the 200 puts. So I'm going for a full $10 wide spread. This one's done for a $2 and 40 cent debit. As I said, I'm a little underwhelmed of the, the recent cycle over here. I don't need my watch to be slightly thinner. Or maybe I could just take it out there, paint it black. It's not doing it for me right now. All right? I have to correct myself. I said 23rd. The preorders are the 13th for the new phone. Okay, I know you'll be in line. Right? You're going to be in line there for that one too. Standing outside the Apple Store. No way, no way. I still miss my BlackBerry, but I do like my Apple phone very much. Don mentioned Nicole that he's underwhelmed. I'm still getting over the underwear comment. I actually went on the site. Don. I don't see those listed anywhere on the Apple website. I'm curious how you got Ahold of a pair, but okay, sticking with the stock as I take a look. Not a lot of conviction one way or the other. On the short term, well-defined bull trend on the longer term, and we'll identify exactly that in just a minute. But first and foremost, we always look for that staircase type pattern, right? In order to participate, you want to be able to have not only a structure that helps you determine which way trend is going, but also structure that helps you determine when that working assumption is no longer a valid one. So basically, the idea is if you're able to establish trend, you can participate with it. Kind of close your eyes and hope it continues. If it doesn't have an area where you know that that's no longer a valid position to be in here sideways, there's just not a lot of conviction one way or the other. One minute candle chart, just a chop trade. But this also feeds into this kind of wave type pattern that we talk about. While you're in an area of sideways consolidation, there's just not a staircase type pattern, right. Because value is being formed. So you have a meeting of the minds between the buyers and the sellers where it's basically, again, efficient market activity and value forming, stepping away. You're going to see it's not just on the one minute candle chart that we've been forming value in fact, 220 is a key area right now. Well-defined lower extreme August lows, well-defined upper extreme 237 those highs we saw earlier this summer. Since then again, it's just been mostly sideways random limited in terms of real conviction. But holding again in this bull trend, because value has been forming at higher and higher levels, that low around 190. Look, we always talk about the prior area value relative to the one that you're currently forming, that prior area being the line in the sand. Look at where her traded right down to. I mean that just screams and speaks to the to the validity of these areas of value. They're kind of like footprints in the sand. The path that the market's taking sometimes more clearly easily identifiable than others. But in this instance you can tell the direction we're headed. Right. It's up not only on that intermediate time frame and that move we just looked at, but this one as well. Look, I've now cued up a weekly candle chart Nicole going all the way back to we're talking spring of 2018. Areas of value that form at higher and higher levels. You can see that process playing out multiple times where we retest key areas and hold each time on the way up. It wasn't just back in August when we retested that 180 area. So simply put bull trend here across multiple time frames. A bit of a chop on the intraday. But this is exactly what we look for when we're talking about that staircase type pattern. It's clearly to the upside okay. Clearly to the upside. He says Don final thoughts. Yeah I like the contentious nature over here Ben. We're going to see in the next two months for sure. So this is a spread that hopefully we'll keep our eye on over the next few months. Again it's out to the November 15th expiration. But again, maybe some of these preorders might be a little bit underwhelming, as I was mentioning. And we're going to find out here in the near term. Thank you both. So much. It's great to see you for the big three today. Don Kaufman and Ben Lichtenste