Before the Bell Aug 20

Tickers discussed: SPY QQQ IWM FB AAPL TSLA MSFT  AMZN  GOOGL NFLX $USD $NAMO $NYMO $NYA50R  SMH $VIX

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 16

  • Monday –  Empire MFG
  • Tuesday – Retail Sales, Industrial Production, Bus. Inv., Housing Index, JPOW Speech 1.30pm
  • Wednesday – Mortgage Appl, Housing Starts, Oil inventory, 20yr Bond Auction, FOMC Minutes 2pm
  • Thursday – Jobless Claims, Philly Fed, Leading Economic Indicators, NatGas inv., 30 yr TIPs bond auction. 
  • Friday – Rig Count.  August OPEX

Vol Returns

An emerging shift in FOMC policy, geo-political tension and almost non-existent August liquidity are a recipe for added volatility. The VIX held above 20 yesterday for the first time in a while. While the VIX is above 20 its tough to hang out in duration longs unless you’re sitting in long-term common shares. Also we may be looking at a regime shift over the next 30 days as we roll through Jackson Hole and the September Fed meeting. Below is the term structure of implied vol on the S&P.  You can see elevated pricing into Jackson Hole and then the September Fed meeting.

Additionally the table via Spot Gamma, shows that traders are currently positioned for a down move into September which coincides with the September Fed meeting.

McClellan Oscillators – Already stretched

View the Oscillators as rubber bands that stretch to either oversold or overbought. The farther the rubber band extends, the more likely of a snap back. As you can see below, both the NYSE and NASDAQ oscillators are at minus 60 and entering the oversold zone. While the rubber band can extend further, the risk of a snap back to the upside increases. The reward for continuing to stay short is diminished.

Fear / Greed Sentiment Indicator

The Fear / Greed meter took a big leg down after being at 49 just 2 days ago. That’s what a red day or two will do.  With sentiment leaning bearish, it is contrarian bullish.  This combined with the oscillators being stretched to the downside it seems more bullish than bearish.

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 Daily

Because the 200ema is in such close proximity to the bottom of the trading range box, I’d view between 210 and 211 as a support zone where a bounce is likely. If price were to break below the 200ema / $210 then I think that would usher in the next wave of selling.

IWM 2 hour

The 200ema is at $210. This aligns well with the prior low of last month.  A move to $210 would offer an objective long entry with a stop just below

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