Stocks looked poised for a strong day yesterday until about 2pm ET. I was hosting the 2pm ET top of the hour update on Tiger TV yesterday and I remember quoting the S&P trading at 3,218 and thinking to myself that the I hadn't seen that price in the S&P in quite some time. Well, it only took 2 hours and the S&P closed at about 3,148 losing about 70 points in the final couple of hours of trading.

The VIX was giving hints that something was not right yesterday, as it was actually climbing all morning even with the S&P up more than 1% intraday. Keep your eye on the VIX as an early indicator to possible sell offs in the market as we approach levels in the S&P that we haven't seen since the market collapse began in February.

Since the market sold off in late February, the S&P futures have only traded above yesterday's price action on 3 days, June 8th, 9th, and 10th. June 11th the S&P sold off 200 points and finished back around the 3000 price level, so this is a volatile price area as the index tries to climb higher yet faces resistance as COVID-19 rages and the economy struggles to open back up.

Bank earnings kick off today with JPM, C, and WFC. DAL is also out with their numbers this morning losing $5.7 billion in the quarter.

Yesterday's ES action:

Last April, Disney announced to the world the details for the upcoming streaming service Disney+. Disney impressed investors by undercutting NFLX with a $6.99 price, and the option to bundle for $12.99 with Hulu and ESPN+. The stock immediately traded higher on those details.

At the time of their launch, Disney forecast it would reach 60 to 90 million subscribers to their new streaming service by 2024. They've basically reached this level already within about 8 months of their start of streaming. It's almost impossible to state how fast Disney+ has reached the subscriber level that they were hoping for by 2024.

Keep in mind, when they told the market they were going to have 60 to 90 million subscribers by 2024, DIS stock sky rocketed to a price level of around $130 that week. As of now some analysts see Disney approaching 200 million subscribers by the same time. NFLX is at about 183 million subscribers as of now.

While Disney is dealing with unparalleled disruptions to their parks, their ESPN sports programming, and their movie production and box office revenue, the future of their company will be decided by their streaming service and the last few months have provided an opportunity to accelerate that growth and Disney has capitalized.

Disney comes out with their quarterly earnings August 4th and you can expect big numbers for their streaming service. The market is grappling with the short term problems Disney is facing, but at some point we will move past this unusual time in our lives and Disney will be perfectly positioned to capitalize on their growth.

We will start to build a long-term position in Disney ahead of their earnings next month. We may also add some options for exposure to their earnings on August 4th. Stay tuned for more Disney updates. Anytime you can get Disney stock at the same price that it was offered when they announced the details of their streaming service back in April of 2019 I believe there is substantial long term value to the stock, even if you have the potential for short term volatility due to COVID-19.

If you liked Disney stock at $115 in April of 2019 when they said they hoped to have 60 to 90 million subscribers by 2024, then you should love it at $116 in July of 2020 when they have already reached at least around 60 million subscribers. The short term pain Disney is experiencing will end at some point and the market will then price in the Disney+ growth and we want to be positioned correctly for when that occurs.

This is a very fundamental take on Disney. I will be breaking it down technically in the days to come as we look to build a core position. Things are too volatile to the downside right now to begin entering any long term positions this morning. We will have some patience and begin with partial positions for our longer-term core positions in the days and weeks to come.

Weekly chart of DIS:

Here is a chart of NFLX so compare how the company has benefited without the strain of other businesses like parks and sports weighing it down. NFLX out with their earnings Thursday.

Thank you for signing up for my new trading service as a charter member of Rocket Equities and Options. I look forward to the opportunity! I will have daily updates all this week and probably for the foreseeable future while volatility is with these markets. This is a unique time in the markets and the world with many different opportunities. Patience and risk control will be key for both long term and short term trades. Stay tuned for more updates as we begin to examine the equities and options we'll be looking at building positions in.