Tickers: SPY QQQ IWM NYSE & NASDAQ Hi-Low’s Sector ETFs
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.
Inspiration
Yesterday I had a brief interaction with a member in the trading room. I had asked him how it was going and he said fine, but then he added that he has the most trouble with his psychology. FYI – He is not alone. We all struggle with our trading psychology. The mechanics of trading are relatively simple; its the execution that’s the issue. As you move forward, commit yourself to doing the work honing your trading psychology skills. That will be the thing that secures your success.
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 1.5x to maximize efficiency without loss of clarity.
Find the Companion Video HERE
Macro Data Releases Week of Feb 22
- Monday – Holiday
- Tuesday – Case Shiller; Housing prices; Flash PMI; Consumer Confidence; Richmond Fed MFG; 2 yr Bond Auction
- Wednesday – Mortgage Applications; Redbook; 5yr bond auction
- Thursday – GDP; Jobless Claims; Chicago Fed; New Home sales; NatGas & Oil inv; 7yr bond auction
- Friday – /Durable Goods; Personal Income; Consumer Sentiment
Now What?
Today’s weekly close is going to be technically important. We have the 40 week moving average over head on the weekly charts and all of the indexes remain below their 200ema’s. If we close the week red, despite the dramatic rally, it will be just another red bar on the chart. If the bulls can take the week green, then it will give the bears a little more to think about.
In the meantime, nimble traders can play the volatility but I think swing traders should view long positions as vacation rentals. A nice place to visit but not over stay your welcome.
Oscillator Update
The consequence of the big bounce in the averages yesterday resulted in a modest bounce in the oscillators. The oscillators are not extended so they are not particularly predictive at these levels.
NYSE and NASDAQ New Highs – New Lows
The persistent “buy the dip” regime that was persistent since the covid recovery changed in late November to a “sell the rip” regime as new lows expand and the net new highs cannot break above the zero line.
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 Daily
My target for this leg is $405 which I expect to hold at least initially given it is both technical support and a key strike where a “put wall” resides. A sick rally above yesterdays close would require a fresh assessment of the situation.
SPY 2hr
SPY 30min
QQQ Daily
3 technical objectives here. $315, $310, and a gap fill to $300. If $300 were to be reached, I’d expect that to hold on the initial tag.
QQQ 2hr
QQQ 30 min
IWM Daily
Breaks below the January spike low of $188 would open the door to more selling. Not a ton of support below $188 if you look at a weekly chart. Really not much to hold it until $170. That’s a big drop and would likely need a further sell off of the broader markets to push it down to those levels.
IWM 2 hr
IWM 30 min
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