Yo Pit Crazies,

On Tuesday, we had the first 1% down day in 24 trading days, by my count. 

Microsoft Corp (Ticker: MSFT) might save the market with their big growth in search. 

Alphabet Inc (Ticker: GOOGL) on the other hand might have troubles. They needed a $70 billion buyback, and their stock is only up $2.

There was a time I thought search and GOOGL was a lock. The big rally for MSFT means that MSFT might eat some GOOGL lunch, but that is on a shrinking ad growth. 

Not sure the rallies of both stocks hold up today, but I would give the nod to MSFT.

Into the close Tuesday that was enough to stem the sell-off.

The issue is, tech has not been the problem in 2023 …

The bigger problem was something else.

Is that problem still around?

The Bank Wild Card Reared Its Ugly Head Today

First Republic Bank (Ticker: FRC) saw a $100 billion exodus of deposits. That is a problem. 

While lots of banks have reported, this puts the eerie specter of losses in some midsize banks front and center. That should make the market ring up the volatility register.  

FRC five-day chart as FRC equity goes to 0.

Big Tech could be a stabilizing force after Tuesday’s report, but stocks don’t do well when banks fail.

The next item on the calendar, like clockwork, is the FOMC rate announcement on May 3.  I would expect the VIX to hold here or even trade a little higher into the number.

If another bank has issues, VIX will jump. If not, Big Tech will save the market in the short term.

The Rundown

OP Mentoring DIV+ 

Verizon Corp (Ticker: VZ) April 21 30/40 strangle, 38/42 strangle 100 shares, 34 puts closed for a 12% gain.

Big Money Flow

Fisker Inc (Ticker: FSR) May 12 5.5 puts closed for a 50% gain.

To Your Trading Success,

AG