Before the Bell Aug 10

Tickers discussed: SPY QQQ IWM FB AAPL TSLA MSFT  AMZN  GOOGL NFLX $TNX TLT PINS JETS SNAP UPS

Before the Bell  is premarket prep for active traders. The note provides detailed stock market technical analysis focused on the indexes and FAAMGs. Key levels and trading locations are provided, along with trading plans and timely commentary to keep you on the right side of the trade.

Earnings 

Companion Video 

The video is a detailed technical review of the indexes and FATMAAN names. All the key trading levels are identified along with commentary and trade plans for each ticker. Trade ideas are also discussed.  Run the video at 1.25x to reduce run time.

Find the Video HERE

Macro Data Releases Week of Aug 9

  • Monday – JOLTs,  Bostic / Barkin FOMC speakers
  • Tuesday – NFIB Optimism Index, Productivity & Costs,  FOMC Evans
  • Wednesday – CPI, Atlanta FED inflation expectations, Oil inventories at 10.30, 10 year bond auction, FOMC Evans
  • Thursday – PPI,  Jobless Claims,  NatGas inventories, 30yr bond auction,
  • Friday – UM Consumer Sentiment, Import / Export Prices. 

Summer Slowdown

The market is in the summer doldrums with many traders on vacation and the remaining ones dont seem to have much of a risk appetite. The parade of FOMC speakers over the past 10 days have had a more hawkish tone so that hasn’t helped either.  Stay patient here and resist the urge to over trade because you are bored. Find other productive things to do. Work on your charts, review your journals, do a load of laundry. Nothing bearish has happened so no need to change our positioning.

Bond Interest Rate Watch

Bond yields were able to break above technical resistance at 1.30 % to close at $1.317%.  The next upside targets would be 1.4% and then $1.45 %.  We may also see a reaction at 1.375% as that is where the lower trend line from the previous channel will intersect price.

A rising rate environment, if it holds, should be a difficult headwind for bubble / high-valuation names.  Stay focused on the sector rotation themes we’ve been discussing. The key is getting it right, not being first. There have been a bunch of head fakes. 

10 year Bond Yield

TLT

Price drifted lower during Monday’s trading and thus the sell signal generated from the trend line break is still in effect.  That said, the convergence of the 50 & 200ema are just below and could provide support.  This sell signal has me leaning toward a rotation into cyclicals, value, trade.

Market Snapshots

Graphics via Market Ear

 

 

Fear / Greed Sentiment Indicator

Folks remain bearish but the meter is slowly moving higher.  IMO it will be out of character for the market to sell off with this many people already scared.  Rug pulls usually are orchestrated to hurt the most people by happening when everyone is bullish and cant see it coming.

 

Signs of a Shift to Cyclicals

Rising Rate Environment Areas of Interest.

  • Falling Dollar is supportive of Commodities and cyclicals in general.
  • Rising Rates ( $TNX ) and / or a break of TLT $148
  • Cyclically focuses ETF’s to watch.:  XLB, XLE, XLF, XLI, KRE, IWM
    • Set alarms on the above EFTs for further confirmation of the move.
    • Traders can then drill down in specific sectors for invididual names if desired
  • Materials.  Commodity and Specialty Chemicals
  • Metals and Mining.  Copper, Aluminum, Steel, XME
  • Industrials. HON / MMM / GE  Infrastructure names
  • JETS / Airlines, Delivery services , marine transport, etc
  • KRE; Regional Banks…………more highly levered to rates than mega banks
  • Travels, Hotels, Cruise Lines re-opening names.

INDEX CHARTS

A detailed walk-through of the levels and trading strategy for the indexes is given in the video ( link above) . The static charts are provided for reference. The FATMAAN names are also reviewed in the video along with trade ideas and other charts of interest.

SPY 2 Hour

SPY 30 Min

QQQ 2 hour

QQQ 30 min

IWM 2 hour

IWM 30 min

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