Tickers discussed: SPY QQQ IWM FB AAPL TSLA MSFT AMZN GOOGL NFLX $TNX TLT GOOS CLX WIX
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.
Watch Small Caps
Going to keep it short and sweet here. If / when IWM breaks above $224, I like the idea of getting long and looking for a minimum move to $230. If the rotation to cyclicals and value is for real, the small caps should start working and may even outperform.
Bond Interest Rate Watch
Although it is not clearly shown here, Bond yields had a wild ride yesterday. An exceptionally strong 10 yr bond auction as 1pm drove rates to nearly 1.3% but by the close, rates popped right back up to close nearly flat on the day. Although the pace of the advance may slow, the next upside targets are 1.4% and then $1.45 %.
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
As we suspected, TLT found some support at the confluence of the 200ema & 50 ema at $146. Traders should alarm $146 as a signal either to get short if you want to trade it or simply as a heads up that rates are going higher and thus continuing to support an advance in cyclicals / Value / banks etc.
Trades about to Happen
$GOOS Canadian Goose
THe company traded down after earnings leaving a $3 gap above. Note price closed on the 200ema at about $38.50. THose interested in a long can do so against the 200ema w/ a stop just below $38. THat would give you an opportunity for price to trade up to the gap at $41 and possibly fill in at $44. Pure Gap traders can alarm $41 for the gap entry.
$CLX Clorox
Nice bracket set up here with a $12.50 gap above that needs to get filled. Alarm the levels shown. A break below $160 would signal the downtrend is resuming and sets up as a nice short.
$WIX Wix
A gap down after earnings has price testing key long term support. If you pull up the weekly chart, you will see a major thin zone below $215 all the way down towards $140. It looks like there is both nice upside potential and downside potential in the name. Set yourself some alarms at $240 and $215. If you are interested in the long side, I’d just buy it now with a stop just below $215. A simple move to test the gap is $25 away which would make it a nice trade. If you get stopped out, be prepared to take it the other way to the short side. Again, i encourage you to look at the weekelt chart.
Fear / Greed Sentiment Indicator
Folks remain bearish but the meter is steadily creeping 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
- We have confirmed breakouts in XLB, XLF, XLI
- $TNX has broken above 1.3%
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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