Wall Street Is Selling

A $76,000 big money trade in Upwork (UPWK) is noted. A trader bought $17.50 strike call options expiring on February 20th, 2026. These options are already in the money, and the relatively short expiration suggests an expectation of a move soon. Upwork, an online marketplace for freelancers, has been consolidating around $19.50-$20.00 since the beginning of the year. If this $20-$19.50 zone holds as support, it could be a good play, but the short-term expiration (about a month left) necessitates using this support level as a strict stop-loss.

The stock market, represented by the S&P 500, was close to making new all-time highs but experienced a significant sell-off despite positive news. This included a de-escalation of tensions with Iran (leading to a drop in crude oil prices by over 4%) and strong earnings from Taiwan Semiconductor, a key AI industry player, which saw a 35% year-over-year profit increase. However, the market notably pulled back, with the SPY turning over from a resistance level around $695. Contributing to the sell-off was news of Congress delaying crypto market structure legislation, causing crypto-related stocks to tumble. Overall, while there was positive external news, profit-taking and selling pressure ultimately dominated the market action.

A significant divergence is observed between retail and institutional investors. Retail traders are aggressively buying stocks, pouring $12 billion into equities last week, marking the highest level in 9 months. In contrast, institutional investors appear to be taking profits, indicating a less bullish short-term outlook. The market has consistently rejected new highs recently, with the SPY encountering strong resistance around $695, leading to sharp pullbacks. This suggests that while the overall market is strong with all S&P 500 sectors above their 200-day moving average, institutional players are pushing the market down in the short term, potentially setting a 'Wall Street trap' for retail investors.

Silver has experienced a historic rally in 2026, with prices up 29.7% within 15 days. However, recent after-hours trading saw a sudden 8% drop, though prices have largely recovered. This volatility marks a test for the rally. Key support for silver (SLV) is identified at the $80 level. If this level holds, the bullish momentum is likely to continue, bringing silver closer to its all-time high (only 2% away). Conversely, a break below $80 could trigger further profit-taking, which historically tends to be more rapid and violent than the upward trend, as seen in euphoric rallies of stocks like Tesla or GameStop. Traders are advised to have a solid plan for both upside continuation and potential downside reversals.

Next week, the market will be closed on Monday, January 19th, in observance of MLK Day. The remainder of the current week has a clear economic and earnings schedule, suggesting a quiet period before the holiday. This is important for traders to note for planning purposes.

Several stock setups are highlighted: - **CE (Celanese Corporation)**: A bullish play based on a $500,000 big money trade in December for June 18th call options (strike $45). The stock is confirming the trade's direction and is approaching key resistance at $50. - **Nvidia**: A short-term focus on potential price movements. There's a sell wall at $190, implying a move above this could lead to upside, but a gap fill down to $183 is also possible, especially with fewer buyers stacked below current levels. - **SNDK (SanDisk)**: On a bearish radar for a potential overextension reversal. While a counter-trend play is risky due to uncertainty of timing, the stock's overextended nature provides ample room for pullback. Key support is at $400, and confirmation of downside pressure is crucial. - **COF (Capital One)**: Bearish outlook due to a looming 10% credit card cap effective January 20th. With the market closed on Monday, a sell-off on Friday ahead of the cap is anticipated. Recent big money put debit spreads ($210 strike puts bought, $170 strike puts shorted) align with this bearish sentiment.

Three momentum plays are identified for potential continuation based on specific price levels: - **MGM Resorts (MGM)**: Bullish if it breaks above $35.50, due to strong support. - **Delta Airlines (DAL)**: Bullish if it breaks above $71.50, continuing its positive trend. - **Lucid Motors (LCID)**: Bearish if it breaks below $10, following a brutal short-term performance and nasty sell-off.