The Dow rallied more than 380 points Friday for its third-straight daily win, and snapped a four-week losing run. Likewise, the S&P 500 snapped a three-week losing streak, while the Nasdaq scored its best week in a month, and the Cboe Volatility Index (VIX) logged its worst week of the year. Bond yields pulled back earlier today, helping to bolster sentiment on Wall Street.

Continue reading for more on today's market, including:

• Why J.P. Morgan is bullish on Procter & Gamble stock.
• Catch up on all of the week's biggest stories.
• Plus, Costco options pop; solar stock hits 14-year high; and a rallying home goods name.

5 Things to Know Today 

1. Amazon.com (AMZN) announced it will pause construction on parts of its second headquarters in Virginia. (CNBC)
2. Questions surrounding Silvergate Capital's (SI) viability dented cryptocurrencies today. (MarketWatch) 
3. Why options traders blasted Costco stock.
4. The solar stock that nabbed a 14-year high.
5. Is this home goods giant poised for a rally?

Gold Logs First Winning Week in More than a Month

Oil futures reversed earlier losses, after the United Arab Emirates (UAE) denied reports that there was an internal debate to leave the Organization of the Petroleum Exporting Countries (OPEC). In addition, optimism over Chinese demand helped April-dated crude futures tacked on $1.52, or 1.9%, to close at $79.68 per barrel. For the week, black gold added 4.4%.

Gold prices broke free from a four-week losing streak, and turned in their fourth winning session in five, after the U.S. dollar eased. Specifically, April-dated gold futures added $14.10, or roughly 0.8%, to settle at $1,854.60 per ounce Friday, and 2.1% for the week.

Subscribers to Chart of the Week received this commentary on Sunday, February 26.

Before we unveil chart of the week, we have a special offer that should not be ignored! Schaeffer’s Vertical Options Trader – the same service we’re about to discuss – has an amazing LIFETIME deal currently running. Click the link below for a lifetime subscription of VOT for only $995!. That’s over 50% off! But don’t take my word from it, keep on reading to see how VOT trades can almost quadruple your money in under two weeks! Yes, that sounds like an informercial, but its actually true. Find out how below!

Schaeffer’s Vertical Options Trader

“Tiiiiime, why you punish me?” Darius Rucker of Hootie and the Blowfish sang that in 1994. It’s an existential song that many an option trader has sung. In the options market, trading stock direction usually involves buying or selling a call or put option. One of the most significant disadvantages of options trading is the erosion of extrinsic value over time, measured by theta.

Never fear, options traders and 90’s alt rock fans, for there is an options strategy that limits the impact of time decay. Earlier this month, subscribers to our Vertical Options Trader service scored a 274% profit in just under two weeks on our recommended Coinbase Global Inc (NASDAQ:COIN) February 17, 55-65 vertical debit call spread. Unpacking the highlights of this trade underscores the utility of the vertical debit spread.

A vertical debit spread is achieved by buying an at-the-money (ATM) option and selling an out-of-the-money (OTM) option in the same expiration month. The credit received from writing the OTM option offsets the entire cost of purchasing the ATM. Unlike other strategies, the risk is limited to the difference between the costs of the extended leg and the income from the short leg. As a result, this type of spread is especially effective when trading options.

Here’s what Senior Market Analyst Joe Hargett had to say about vertical debit spreads: “A vertical debit spread can consist of ATM, OTM or in-the-money (ITM) option contracts – it just depends on your goals for the trade. Bernie’s trade that we’ll get to below uses two OTM options to construct the spread. The credit received from the sold OTM option does not cover the entire cost of buying the purchased option in the spread. The risk is limited to the difference between the credit received from the sold option and the premium paid for the purchased option, while the maximum profit is capped at the difference between the spread between the sold and purchased options and the premium paid for the entire spread. This is both a blessing and a curse for spread trades, in that your upside is clearly capped, (so you have to structure your spread accordingly) but it also sets your target gain from the start of the trade. In other words, you automatically limit your greed with this trade.

As an aside, if you want to hear more from Joe, check out his most excellent podcast debut below!

When COIN was recommended on Jan. 20 by founder and CEO Bernie Schaeffer, the cryptocurrency platform had taken out its 200-day moving average, as speculative assets such as Bitcoin (BTC) sprung back off the mat to hurtle past $20,000 to start 2023. The $10 billion market cap level was reclaimed in the process, and the shares were testing support at 50% above its Jan. 6 lows.

Bernie also noted a November 2022 cover story from The Economist, titled “Crypto’s Downfall.” We’ve discussed the cover story fallacy in this space before, but COIN’s recent strong price action offered up some contrarian implications that couldn’t be ignored. With these trade drivers in mind, the spread went as follows: buying (to open) the February 17, 2023 55-strike call and selling (to open) the February 17, 2023 65-strike call.

With COIN trading at $49.92, the stock proceeded to gap higher by 11.6% the next trading day. It then rattled off outsized moves of 15.8% on Jan. 27 and 12.4% on Feb. 1, trading as high as $65.30. The next day on Feb. 2, COIN gapped higher again, and trading at $71.50, Bernie instructed subscribers to sell 50% (first half) of the vertical debt spread position. The next day, with COIN trading at $73.16, the second half of the position was closed, for a total overall profit of 274%. Options traders had nearly quadrupled their money in the span of two trading weeks.

This was, in a way, the perfect options trade. It factored in contrarian indicators for the underlying equity, macro tailwinds, and a strategy catered to stocks expected to move strongly in the period encompassed by the date of recommendation to the option expiration date in the following month.

FREE: Schaeffer’s Top 2023 Stock Picks!

Schaeffer's Market Mashup Podcast: Threading the Needle With Joe Hargett

March is already looking up for Wall Street, after February brought investors back down to earth. All three major indexes are headed for weekly wins and will snap their respective weekly losing streaks. Bond yields were in focus most of the week, with the 2-year Treasury yield hitting its highest level in 10 years, while the 10-year Treasury yield jumped above 4%. 

Earnings Reports Rule the Roost

Earnings season remains in full swing, for at least one more week. Li Auto Inc's (LI) strong outlook gave the electric vehicle (EV) sector a boost early in the week, while Zoom Video Communications Inc (ZM) issued an upbeat forecast as well. Retail giant Target Corp (TGT) reported its first earnings beat in a year. Options traders also had field days after earnings reports from AMC Entertainment Holdings Inc (AMC), Lowe's Companies Inc (LOW), Kroger Co (KR), and Costco Wholesale Corporation (COST). 

Tesla's "Master" Plan

Tesla Inc's (TSLA) investor day was a big highlight this week, with CEO Elon Musk revealing his "Master Plan 3." Union Pacific Corporation (UNP) surged after the company revealed its CEO succession plan, while Reata Pharmaceuticals Inc (RETA) broke out after the U.S. Food and Drug Administration (FDA) approved its rare genetic disorder treatment. Novavax Inc (NVAX), meanwhile, plummeted after the company questioned its ability to stay in business. 

Jobs Data Looms Next Week

A handful of earnings and economic data are due out the first full week of March. In the meantime, take a look at S&P 500 trendlines to watch according to Schaeffer's Senior Vice President of Research Todd Salamone, plus, the best stocks for options traders since the start of 2022, according to Schaeffer's Senior Quantitative Analyst Rocky White. 

J.P. Morgan Securities this morning upgraded Procter & Gamble Co (NYSE:PG) to "overweight" from "neutral," with a price-target hike to $155 from $150, saying the blue-chip giant could be an "earnings compounder." At last glance, PG was up 0.5% at $140.62. 

On the charts, PG has been been dealing with both pressure at the $141 level and from its 100-day moving average since early February. Year-to-date, the equity is down 7.3%. 

Of the 28 analysts in coverage, 17 now carry a "buy" or better rating, with 10 a "hold," and one "strong sell." The 12-month consensus price target of $155.02 is a 10.6% premium to current levels. 

Options traders have been much more bullish than usual over the past couple weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), PG's 10-day call/put volume ratio of 3.44 ranks higher than 94% of readings from the past year. 

Now could be a good time to weigh in on the security's next move with options. The stock is seeing attractively priced premiums at the moment, per PG's Schaeffer's Volatility Index (SVI) of 17%, which sits in the very low 2nd percentile of its annual range. Furthermore, the security's Schaeffer's Volatility Scorecard (SVS) of 94 out of 100 means the stock has exceeded option traders' volatility expectations during the past year.

Stock futures are pointed higher this morning, set to extend yesterday's gains as U.S. Treasury yields pull back. Comments from Atlanta Federal Reserve President Raphael Bostic favoring a 25 basis point rate hike are encouraging traders, as they wait for the latest Institute of Supply Management (ISM) non-manufacturing purchasing managers' index (PMI) reading.

Futures on the Dow Jones Industrial Average (DJIA) were last seen 107 points higher, while Nasdaq-100 Index (NDX) and S&P 500 Index (SPX) futures are also set to open firmly in the black. For the week, all three major benchmarks are eyeing wins.

Continue reading for more on today's market, including:.

• How options traders played Kroger's earnings report.
• Why this crypto stock plummeted to record lows.
• Plus, praise for AAPL; Procter & Gamble stock upgraded; and Costco's revenue miss.

5 Things You Need to Know Today

1. The Cboe Options Exchange (CBOE) saw more than 1 million call contracts and 854,178 put contracts traded on Thursday. The single-session equity put/call ratio dropped to 0.81 and the 21-day moving average stayed at 0.79.
2. Morgan Stanley raised its price target on Apple Inc (NASDAQ:AAPL) to $180 from $175, a 23% premium to last night's close. The analyst cited strong iPhone demand and gross margins, services growth, and new product launches. AAPL is up 0.9% ahead of the open and sports a 12.3% lead so far this year.
3. Procter & Gamble Co (NYSE:PG) stock is up 1% before the bell, after scoring an upgrade from JP Morgan to "overweight" from "neutral." The brokerage said the company may become an earnings compounder later this year and has a resilient consumer base. Year-to-date, PG is up 7.7%.
4. The shares of Costco Wholesale Corporation (NASDAQ: COST) are down 2.2% in premarket trading, after the retailer announced a fiscal second-quarter revenue miss, while earnings came in above expectations. No fewer than three analysts cut their price targets, including Telsey Advisory Group to $540 from $580. COST is down 8.2% year-over-year.
5. The ISM non-manufacturing PMI comes out later this morning.

Asian Markets Rise on Fresh Economic Data

Asian markets finished the day higher on Friday, after China’s Caixin/S&P Global services purchasing manager’s index (PMI) came in at 55 in February, rising from January’s 52.9. Easing inflation levels in Japan pushed the Nikkei to log a 1.6% rise. Meanwhile, Hong Kong’s Hang Seng rose 0.7%, China’s Shanghai Composite added 0.5%, and the South Korean Kospi tacked on 0.2%. 

In Europe, more inflation data rolled in. A flash estimate for the euro zone showed inflation easing to 8.5% from 8.6%, though still above analyst expectations. London’s FTSE 100 is inching lower, down 0.01% at last glance, while the French CAC 40 and German DAX rise 0.7% and 0.9%, respectively. 

Higher interest rates failed to drag down investor sentiment, and the Dow added more than 340 points for its best session in nearly a month. The S&P 500 and Nasdaq reversed their earlier losses, even after the 10-year Treasury yield climbed above 4% and the 2-year yield hit levels not seen since July 2007. 

Continue reading for more on today's market, including:

• These 3 stocks made big moves today.
• This homes goods stock could extend its rally.
• Plus, next week's highlights; the latest post-earnings surge; and behind Tesla's stock slide.

5 Things to Know Today 

1. A group of U.S. lawmakers are pressuring the world's largest crypto exchange Binanace for financial information. (CNBC)
2. Ford Motor (F) revealed its new artificial-intelligence (AI) unit that is focused on driverless cars. (MarketWatch) 
3. What we're looking forward to next week.
4. Grocery giant enjoyed a post-earnings surge.
5. Tesla stock powered down after Investor Day.

Gold Prices Snap 3-Day Winning Streak

Oil futures closed at their highest level in two weeks, as demand outlook improved in the U.S. and encouraging economic data rolled out in China. In response, April-dated crude futures tacked on 47 cents, or 0.6%, to close at $78.16 per barrel.

Gold prices snapped their three-day winning streak, after the U.S. dollar regained strength. For the session, April-dated gold futures shed $4.90, or roughly 0.3%, to settle at $1,840.50 per ounce.

The shares of Williams-Sonoma, Inc. (NYSE:WSM) are down 0.7% to trade at $122.69 this afternoon, as shares continue to cool down from an early February rally to the $146 region -- their highest level since September. Though the security still carries an 18.1% year-over-year deficit, it has added 6.8% so far in 2023, and may soon extend its lead thanks to a historically bullish trendline.

More specifically, WSM is within one standard deviation of its 60-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White's latest study, the equity saw five similar signals over the last three years, and was higher one month later 80% of the time to average an 11.6% gain. A move of similar magnitude from its current perch would place shares just shy of $137.

Short sellers are already hitting the exits, with short interest down 7.2% in the last two reporting periods. The 9.55 million shares sold short still account for 14.5% of Williams-Sonoma stock's available float, suggesting a further unwinding of pessimism may also boost the shares.

Additional tailwinds could stem from a sentiment shift among short-term options traders. This is per the stock's Schaeffer's put/call open interest ratio (SOIR) of 3.01, which sits in the 90th annual percentile, meaning these traders have rarely been more put-biased.