The shares of Lordstown Motors Corp (NASDAQ:RIDE) are off 15.9% at $9.60 this morning, plummeting after the electric pick-up truck company's CEO Steve Burns and CFO Julia Rodriguez both announced their resignations. Lordstown Motors is looking to transition into the commercial production phase, away from research and development, and the resignations will be effective immediately. The firm is working toward filling the positions, while lead independent director Angela Strand will serve as executive chairwoman, and Beck Roof will serve as the Interim CFO. 

RIDE rallied into 2021 before succumbing to pressure near the $30 level. Since then, it's been mostly downhill, with the security bottoming out at a record low of $6.69 on May 11. While it has been able to distance itself from that level in June, the 100-day moving average rejected RIDE's last attempt to rally. Year-to-date, the stock is down over 43%. 

Analyst sentiment has been far from optimistic. Of the five covering the stock, only one considers it a "strong buy," while the remaining four call it a "hold" or worse. Plus, the 12-month consensus price target of $9 is a 4.8% discount to last night's close. 

Short interest has also been on the rise, adding 10.3% in the last two reporting periods. The 34.53 million shares sold short make up 31.1% of the stock's available float, or nearly three days to cover at its average daily pace of trading. 

“Since May 13, all SPX closes have been contained inside the channel I have included in this commentary. This might be considered a win for the bulls, though… note that the SPX failed to take out this year’s early May closing high of 4,233 last week, which is another level to tune into.”

          - Monday Morning Outlook, June 7, 2021

Though there was a bit of a change last week, the spirit of my observations is in play as we enter standard June expiration week. That is, the S&P 500 Index’s (SPX - 4,247.44) early May, all-time closing high of 4,232.60 remains important in the short term. After struggling to overtake this level early last week, Thursday and Friday’s trading sessions established a new record closing high. But Friday’s intraday low was back below 4,232.60, implying these closes are hardly convincing breakouts, even though the heat seems to have been turned higher on bearish market participants.

If a more convincing breakout occurs this week, the next thing to watch is the upper boundary of the channel displayed in the chart below, which was just above the round 4,300 century mark at 4,323 on Friday. For what it is worth, the 4,296 level is a round 20% above the October 2020 all-time closing high. For those that bought the November breakout above the October high, which occurred when positive headlines surfaced on Covid-19 vaccines, the 4,300 area may prove important from a profit-taking vantage point at a round number percentage above a former high. Finally, and coincidentally, 4,300 on the SPX is the median Wall Street strategist year-end target for the SPX.

If sellers emerge and push the SPX back below the May closing high, potential support is between 4,170 and 4,190, or the lower boundary of the channel in place since November, plus the vicinity of the SPX’s 50-day moving average.

With respect to the SPDR S&P 500 ETF Trust (SPY - 424.31) open interest configuration, the big call open interest at the 425-strike – which is equivalent to SPX 4,250 – stands out to me. Most of these calls were bought-to-open, implying that if the SPY remains below the 425-strike into Friday, there will be selling of S&P futures related to this call open interest, generating expiration-related headwinds for stocks. A less likely scenario would involve delta-hedge buying that produces larger-than-normal immediate tailwinds. However, there is not much call open interest at strikes above 425 that could act as magnets, putting the SPX at risk of a swift move back toward the strike after an initial burst through it.

Per the second open interest graph below, the least probable scenario is delta-hedge selling in the week ahead, as the biggest put open interest strikes – where there is not a huge number of call contracts – does not come into play until the 390 strike, which is roughly 8% below.

“...option speculators recently reached a level of cautiousness or pessimism on components of the Nasdaq-100 index (NDX--13,686.51) going back more than a year…the ratio of put buying (a bearish speculative wager or a hedge to protect a long position) to call buying (a speculative bullish bet or short position hedge) was in the upper boundary of this 2-1/2-year period before rolling over. The roll-over in this ratio from high levels has historically been bullish, suggesting that pessimism on this group may have hit a climactic high. Therefore, odds have improved that this group could regain its leadership role after disappointing investors for most of this year...  technical challenges remain for the index. First and foremost, the 14,000-millennium barrier must be overcome, which stopped the index dead in its tracks in April.”

          - Monday Morning Outlook, June 1, 2021

Since I made these comments at the beginning of the month, the Nasdaq-100 Index (NDX – 13,998.30) has rallied nearly 300 points, or just over 2%. However, it remains below the critical 14,000-millenium level. This negative sentiment, as measured by option buyers on NDX components, is unwinding quickly per the chart below, which has an overlay of a related exchange-traded fund known as the Invesco QQQ Trust Series (QQQ - 341.24).

As to the unwind, the direction of the 10-day buy-to-open put/call volume on NDX components is bullish, as there is still room for this ratio to move before hitting levels that qualify as overly optimistic.

A continued unwinding of the bearish sentiment from a few weeks ago could finally push the NDX above the elusive 14,000 level this week. In fact, the price action around the 14,000 level since mid-February resembles that of the NDX’s behavior around 12,000 in late August through November 2020. If a breakout above 14,000 occurs, the next hesitation level could be 14,176, which is about 10% above the NDX’s 2020 close.

Options on Cboe Volatility Index (VIX - 15.65) futures expire on Wednesday morning. As such, I cannot help but go back to the last major VIX expiration in May. The observation above is one I made on Twitter in May. Since I made that comment, the VIX declined significantly, hitting a low of 15.15 on Friday, which is comparable to a low just below 17, before expiration of May VIX futures options.

Note in my Twitter comment last month that I included a May VIX open interest configuration graph. The VIX low on May 7 was around the 17 strike, before its May 19 settlement value of 25.46. The volatility pop left a huge number of put contracts worthless. 

The VIX low around the last heavy put open interest last week resembles the May action to a degree. It would take a major volatility pop within the next few days for an equivalent number of put contracts to expire worthless at Wednesday morning settlement. Nonetheless, this is something to watch during the beginning of the week.

In other words, a volatility pop could be exaggerated on any news that sparks a drop in equities. Such a scenario could be another opportunity to sell volatility after Wednesday morning VIX futures settlement and the expiration of June VIX options. As a side note, there is a Federal Open Market Committee (FOMC) meeting this week, but anything that comes out of it will probably not be released until after the VIX settles on Wednesday morning.

Continue reading:

• The Week Ahead: Middle of June Packed With Economic Data
• Indicator of the Week: Diving Into Gamma-Weighted SOIR as a Bullish Indicator

Investors will be rounding out mid-June with a mix of economic reports and earnings this week. Plenty of manufacturing data will be highlighted this week, as well as housing. Wednesday will bring announcements from the Federal Reserve and its Chairman, Jerome Powell. Meanwhile, though earnings season has come and gone, there will still be a handful of quarterly reports to unpack, including H & R Block (HRB), Kroger (KR), and Smith & Wesson Brands (SWBI). 

Today's economic data schedule is empty. Investors still have inflation and the possibility (or impossibility) of economic recovery on their minds.

There are no public companies slated to release quarterly earnings reports today, June 14, as earnings season winds down.

In case you missed it, last week we dropped the 411 on meme stocks. We provided some background, what qualifies a stock as a meme stock, and a bunch of other frequently asked questions. So, here is everything you need to know about meme stocks. At Schaeffer's Investment Research, we see major opportunity surrounding meme stocks to be played from an options perspective. More on that, soon!

Looking ahead to tomorrow, things will get busy fast for investors with retail sales, the producer price index (PPI), Empire state manufacturing index, industrial production data, business inventories, and the NAHB home builders' index slated for release. 

All economic dates listed here are tentative and subject to change.

This week saw plenty of action, not only from the major benchmarks, but also from retail investors who set their sights on a number of heavily shorted stocks. Kicking off the week, the Dow extended the previous week's losses, while the Nasdaq and S&P 500 saw muted sessions against a backdrop of noise made by "meme" stocks. Tuesday was another quiet session, with the S&P 500 simmering just below its record highs for the majority of the day.

Wednesday's trading was more of the same. All three major indexes finished the day with slight losses, while traders cautiously awaited the next day's consumer price index (CPI) release. Though May's CPI reading saw its fastest growth since summer of 2008 -- up 6% year-over-year, and 0.6% for the month -- Wall Street largely shrugged it off, sending the S&P 500 to finally snag a fresh record high on Thursday. The Dow and Nasdaq also closed the day on a high note. It looks like the S&P and Dow are cooling during today's session, though, and the blue-chip index looks set for a weekly loss.

Meme Stock Craze Rages On

What seemed like a fun way for retail investors to make a splash in the trading world has turned into a full-on phenomenon, as meme stocks continue to hog the spotlight. Reddit darling GameStop (GME), which may have been the stock that kicked this whole thing off, caught even more attention ahead of its first-quarter earnings call. Fast food giant Wendy's (WEN) also joined the list of stocks mentioned on Reddit's Wallstreetbets forum, surging to an all-time high in the aftermath. Tilray (TLRY) also entered the fold, and the cannabis producer's CEO welcomed the attention with open arms, lauding retail traders' high level of knowledge on the company and its products. 

Analyst Upgrades Galore

With earnings season come and gone, analysts are keeping themselves occupied with plenty of updates. On the heels of a controversial U.S. Food and Drug Administration (FDA) decision, J.P. Morgan Securities chimed in on Biogen (BIIB) with a hefty price-target hike. Analysts also turned bullish on one notable apparel retailer, saying the company's strategic decisions during the pandemic are paying off. Looking at the long-term game, Fox (FOXA) nabbed an upgrade from Well Fargo, as the company moves its focus to sports betting lines. Lastly, an earnings beat brought the bulls out for Stitch Fix (SFIX) stock, and the company raised its 2021 revenue beyond analysts' expectations.

Another Bullish Indicator for Investors to Utilize

There's a handful of quarterly reports due out next week, including those from H & R Block (HRB), Kroger (KR), and Smith & Wesson Brands (SWBI). More economic data is on the way too, with plenty of manufacturing data and a Federal Reserve announcements on the docket. In the meantime, check out Schaeffer's Senior Quantitative Analyst Rocky White's rundown on how the Gamma-Weighted SOIR can be used as a bullish indicator. Traders might also want to take a look at an explanation of what the summer months could mean for market volatility. 

The shares of Biogen Inc (NASDAQ:BIIB) are up 1.5% at $421 this morning, following a slew of analyst bull notes, including a hefty price-target hike from J.P. Morgan Securities to $435 from $269, as well as an upgrade from UBS to "buy," and an upgrade from Bernstein to "outperform." Both brokerages are expecting this week's Food and Drug Administration (FDA) approval of Biogen's Alzheimer's drug Aduhelm to give it a big sales boost. 

The new drug has been the subject of controversy this week, with a third member of a key FDA panel resigning over its approval last night, calling it "one of the worst drug approval decisions in recent U.S. history," in a resignation letter. The treatment has a hefty price tag, too. Biogen listed the treatment at $56,000 per year -- much higher than the $10,000 to $25,000 price several analysts were expecting -- but promised not to hike the price for four years. 

The maelstrom of news surrounding the drug has BIIB making some incredibly outsized moves. The stock surged 38% on Monday, hitting a record peak of $468.55, and has continued to climb higher for most of the week. Should today's gains hold, the stock could be heading for its biggest weekly percentage gain on record. 

Today's round of bull notes could just be the beginning for Biogen. The equity's 12-month consensus price target of $390.49 is a 7% discount to last night's close. Plus, heading into today, nine considered BIIB a "buy" or better, compared to 16 calling it a "hold." 

The options pits have also been a bit more bearish than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BIIB sports a 50-day put/call volume ratio of 1.19, which stands higher than 90% of reading in its annual range. Plus, the security's Schaeffer's put/call open interest ratio (SOIR) of 1.27 sits in the 91st percentile of its annual range, meaning short-term options traders have been more put-biased than normal. 

Despite all this volatility, BIIB options can still be had at a bargain. This is per the stock's Schaeffer's Volatility Index (SVI) of 43%, which stands higher than just 11% of readings from the past 12 months. This means options traders are pricing in relatively low volatility expectations for the stock at the moment. 

Welcome back to our weekly series, Schaeffer's Cannabis Stock News Update, where we recap what happened in the world of marijuana stocks last week and look ahead to how the cannabis industry continues to take shape in 2021. But before we whiparound the industry, check out our recent articles analyzing meme stocks featuring some sector favorites like Tilray (TLRY) and Sundial Growers (SNDL) and how they "work." We also featured an in-depth article analyzing TLRY. 

Investor interest in the cannabis industry is growing at an explosive rate, and the leading players continue to break through legal barrier after legal barrier, especially in the United States. More than 40 U.S. states legalized recreational and/or medical marijuana by the end of 2020. Now, more and more companies are starting to see the opportunity in cannabis cultivation, marketing, distribution, and technology.

The United States Cannabis Council (USCC) released the results of a poll focusing on the voters' opinions of federal cannabis reform. According to the story, 70% of registered voters in Arizona, Utah, and West Virginia supported legalization of cannabis on a federal level. The major takeaway from this recent study is that more and more Americans are accepting the concept of federal cannabis legalization.

In cannabis news around the world, Morocco has legalized the cultivation and commercialization of cannabis. However, according to the Minister of Morocco, "illegal use and consumption of marijuana is still prohibited in the country." The country wants to take advantage of the development opportunities in the cannabis industry and minimize illegal cultivation through this move.

Here is a quick roundup of major (and action-worthy!) cannabis stock news this week:

22nd Century Group, Inc. (NYSE:XXII), a leading plant-based biotechnology company focused on cannabis research, announced on June 7 that it has entered into a definitive agreement with one institutional investor for the sale of 10 million shares of its common stock at a purchase price of $4.00 per share in a registered direct offering for gross proceeds for $40 million. XXII also shared that, later this week, it would be added to the Russell 2000, Russell 3000, and Russell Global Indexes after the Russell US Indexes annual reconstitution, effective at the opening of the U.S. equity markets on June 28.

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) announced on June 9 that the FDA had granted Orphan Drug Designation status to etrasimod, a highly selective, once-daily, oral sphingosine 1-phosphate (S1P) receptor modulator, for the treatment of eosinophilic esophagitis.

Canopy Growth Corp (NYSE:CGC) has been approved by Supreme Cannabis shareholders on June 10 to be sold. For $435 million. Supreme says 81.05 percent of the votes cast were in favor of the deal. The sale needed at least a two-thirds majority vote to be approved. Under the deal, Supreme shareholders will receive 0.01165872 of a Canopy common share and 0.01 of a cent in cash for each Supreme share held.

On June 9, Cardiff Oncology, Inc. (NASDAQ:CRDF), a clinical-stage biotechnology company developing onvansertib to treat cancers with the greatest medical needs for new treatment options, published a press release announcing the appointments of Mani Mohindru, Ph.D., and Renee P. Tannenbaum, Pharm.D., as independent members of the Cardiff Oncology's Board of Directors.

Cronos Group Inc. (NASDAQ:CRON), an innovative global cannabinoid company, and Ginkgo Bioworks, Inc, which is building the leading horizontal platform for cell programming, announced on June 4 that the two companies have amended collaboration and license agreement that will enable CRON and Gingko Bioworks to accelerate the commercialization of cultured cannabinoids to scale.

GrowGeneration Corp. (NASDAQ:GRWG), the nation's largest chain of specialty hydroponic and organic garden centers, announced on June 7 that Power Si, a proprietary brand operated and owned by GrowGen, has signed an exclusive distribution agreement with GreenPlanet Wholesale, one of Canada's oldest and most trusted hydroponic distributors.

On June 8, HEXO Corp (NYSE:HEXO) announced a commitment to offsetting the company's operational carbon emissions and the personal emissions of all 1,200 employees, with a goal of making HEXO operations 100% carbon neutral from September 2021 onwards. Subsequently, HEXO announced on June 9 that it had won a dismissal of the securities class action pending in the Commercial Division of the Supreme Court of the State of New York. HEXO and certain of its current and former officers and directors were named in shareholder class action lawsuits filed in the Southern District of New York.

Innovative Industrial Properties, Inc. (NYSE:IIPR), the first and only real estate company on the New York Stock Exchange focused on the regulated U.S. cannabis industry, announced on June 8 that it had published its inaugural Environmental, Social, and Governance (ESG) report. IIPR's report highlights how the company addresses the top ESG priorities that matter to its stockholders, employees, tenant partners, communities, and other stakeholders.

On June 10, Neptune Wellness Solutions Inc. (NASDAQ:NEPT) announced that it has launched three new Mood Ring branded cannabis products, including the first branded flower product, in the province of British Columbia.

Also on June 10, Village Farms International, Inc. (NASDAQ:VFF) released the voting results from its annual and special meeting of shareholders held earlier. A total of 49.3 million common shares of VFF, representing 60.76% of the company's issued and outstanding common shares, were voted in connection with the meeting by shareholders and proxy holders.

Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE), the leader in innovative pharmaceutically-produced transdermal cannabinoid therapies for rare and near-rare neuropsychiatric disorders, announced on June 10 that it had adjourned its 2021 Annual Meeting of Stockholders due to a lack of quorum. 46.4% of shares were voted, just below the 50% required for a quorum.

Cryptocurrency and so-call "meme" stocks have been all the rage over the past few months. However, while the crypto and Reddit buzz took home the headlines, big-name FAANG stocks such as Apple Inc (NASDAQ:AAPL),  Alphabet Inc (NASDAQ:GOOGL), and Netflix Inc (NASDAQ:NFLX), were seeing their own noteworthy market moves. Specifically, right now the market is littered with "Large Cap" companies that are in fact down year-to-date (YTD). In focus today is AAPL, which as of Friday has shed 6% YTD. The last time the equity shed this much year-to-date by the month of June, was in 2016.

The main finding that seems strange to me is that meme stocks seem to move up around 10% per day, every day, on average. This happens while larger cap household names – titans of their industry that ultimately support the fundamentals of the market -- have struggled and are down year-to-date.

For example, Apple has spent very little time this year in positive territory, per the chart below. This suggests there is underlying weakness in the market and that the "fast money" has flipped from cryptocurrency to small-cap meme stocks. However, it is yet to be determined if investors will rekindle their love for large-cap tech names that led the market out of the Covid-19 quarantine.

Regardless of AAPL’s next move, it’s been a bit of a feeding frenzy in the equity's options pits. The stock just popped up on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that attracted the most option volume during the past 10 days. According to White, 1,417,825 calls and 659,470 puts were exchanged. The two most popular contracts during this time period were the weekly 5/28 127-strike call and the May 130 call.

Now seems like a good opportunity to weigh in on Apple stock's next move with options. The security's Schaeffer's Volatility Index (SVI) of 23% stands in the 15th percentile of its annual range, indicating options players are now pricing in low volatility expectations. Lastly, the security's Schaeffer's Volatility Scorecard (SVS) ranks at 83 out of 100, implying the stock tends to outperform these volatility expectations -- a boon for option buyers.

Beyond Apple stock’s own technical setup, the way its lagging behind the jumpier names of 2021 reflects the broader rotation out of tech names. Whether this relationship between Reddit darlings and tech heavyweights such as AAPL maintain their seemingly inverse nature, will be something for investors to watch in the second-half of 2021.

Subscribers to Bernie Schaeffer's Chart of the Week received this commentary on Sunday, June 6.

Investors will close out the week today with the economic calendar featuring the consumer sentiment index.

There are no public companies slated to release quarterly earnings reports today, June 11, as earnings season winds down.

In case you missed it, earlier this week we dropped the 411 on meme stocks. We provided some background, what qualifies a stock as a meme stock, and a bunch of other frequently asked questions. So, here is everything you need to know about meme stocks. At Schaeffer's Investment Research, we see major opportunity surrounding meme stocks to be played from an options perspective. More on that, soon!

Looking ahead to next week, investors will be rounding out mid-June with a mix of economic reports and earnings. Plenty of manufacturing data will be highlighted next week, as well as housing. Wednesday will bring announcements from the Federal Reserve and its Chairman, Jerome Powell. Meanwhile, though earnings season has come and gone, there will still be a handful of quarterly reports to unpack, including H & R Block (HRB), Kroger (KR), and Smith & Wesson Brands (SWBI). All economic dates listed here are tentative and subject to change.