Before the Bell Jan 12

Did I help you profit?

Please consider making a modest donation to help me continue producing valuable content.

Tickers:  SPY QQQ IWM FB AAPL TSLA MSFT AMZN GOOGL NFLX SMH XBI

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 – Stop Comparing

Have you noticed that with the recent slide in QQQ and the rug pull in crypto that fewer of the Fintwit crowd are posting their massive P&L gains and how much better they trade than you do?  Comparing yourself to them is not only a waste of time, but it’s harmful. Stop it!.  90% of what you see is likely fake because no one ever post on the days they get their clock cleaned. Focus on improving yourself everyday and good things will happen. Your psychology will remain strong and vibrant instead of being diminished.

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- 1.5x to reduce run time without loss of clarity.

A video will be forthcoming after the dust settles from the CPI Print.   When available, Find the Video   HERE    

 

Macro Data Releases Week of Jan 10

  • Monday – Wholesale Inventories; Bostic
  • Tuesday – NFIB index; Redbook; Ester George.   Jerome Powell nomination hearing
  • Wednesday – Mortgage applications; CPI 8.30am; Atlanta Fed Inflation 10am; Oil inventories; 10yr Bond Auction 1pm; Beige Book 2pm
  • Thursday – Harker, PPI final; Jobless Claims, Brainerd; NatGas inv; Charles Evans; 30 yr bond auction; Fed Balance sheet
  • Friday – Retail Sales; Import/Export Prices; Ind. Production; Business Inventories; Consumer Sentiment; John Williams

Spotlight on CPI and Bond Rates

We’ll know more about rates after today’s CPI print, 10 yr bond auction at 1pm and tomorrows PPI print and 30yr bond auction.  Rate sensitive secotros like tech, ponzi and bubble stocks will be on watch . A spike in yields should send these lower but a rate dump would be supportive.  As can be seen below, the rally has lifted price to key locations on the charts. Time will tell if the CPI print puts the brakes on the rally or it extends.

Make getting Paid Part of the Plan

I learned a lesson this week. I ( and maybe you )  were sitting on some healthy profits on ARK  and a couple of other short positions.  THis oversold, short covering rally ate into those gains. Should have covered, then reloaded on this bounce. Still believe in the Ponzi / Bubble doom loop, but tactically speaking I missed a chance for a nice win.

During this policy transition to lower liquidity, trading is going to be choppy. Rips, dips, sick short covering rallies, vicious sector rotations etc. I think in general it will be harder to find and calmly sit in trades for long periods of time. I think that until we get confirmed BUY or SELL signals across the board, we should expect more of the same.  As traders, we’ve always got to keep the goal of getting paid at the forefront…especially with options. I mean if you’re up significantly in a short period of time, no shame in taking it off or rolling to even money to scrape off the win while staying in the trade.  Food for thought and you manage your positions.

Market Insights

Has China Bottomed?

In the lower panels, showing BABA and KWEB for reference. Still work to do but the bottom may be in.  Note the OH resistance locations. On the macro front, Xi remains a big wildcard. He is no friend of capitalism as he has shown no reluctance in hammering big companies w/ anti-capitalistic policies.  Also dont forget the SEC is closely looking at the VIE structure most of the China names trade under in the USA. Under the VIE structure, investors really dont own anything….just a promise.  THese companies may not end up being de-listed but harder accounting rules n regulations probably down the road

 

Bullish Notes

Notes and theses are nice; watching levels and charts will let us know if they’re right

ESG – Energy Stops Growing

Reports filtering out that Mid and Lower Tier E&P companies are either closing their hedges or letting them roll off. After all, many of these hedges were a part of their funding covenants on their loans. But now since Fink and company have orchestrated the biggest funding black ball of an industry in history, these hedges are no longer necessary. May be a catalyst for higher profitability as oil drives toward the recent highs.

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

$470 is a major pivot level. A break above opens the door for a run to $475.

SPY 2 hour

SPY 30 min

QQQ Daily

While a nice bounce, price remains below the fast moving averages 8,20 and 50ema’s.  Recapturing the 50 will be a significant accomplishment if the bulls can do it.

QQQ 2 hour

As you can see, we are at the 50% retracement level where many rallies die.  An important level for bulls and bears alike.

QQQ 30 min

IWM Daily

Price remains below all moving averages and is the weakest of the indexes. A first positive step would be to reclaim the 200ema. While below price remains open for a retest of the bottom of the range at 210.

IWM 2 hour

IWM 30 min

 

Get inspired, empowered and prepared!!

Join us!

As the host of Trader’s Profit Compass, I work hard to inspire, empower, and prepare aspiring traders to face the markets with fortitude, quiet confidence and inner calm. It’s a protein-rich, sugar free environment without ego or judgement. While I can’t promise that joining our group will change your life, I’d like to think it will help your trading. Give it a spin!  Nothing to lose and potentially much to gain.

Our group of aspiring traders are into active swing trading using technical analysis to find objective, high-probability,  low-risk trades.  Using these processes we’ve been fortunate to be winning; not perfect but winning. If that is appealing to you, join us!  I’d like to think you’d benefit from the work.  You’ll get premium  content 6 times a week including a copy of my Daily Profit Compass, Weekend Profit Navigator, along with other actionable content delivered directly to your mailbox. You’ll even get an invite to our new trading room on SLACK.

Registration is simple and FREE   Visit our homepage  HERE

Spread the word?

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest

Leave a Reply

Your email address will not be published.