Before the Bell July 14

Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA SMH $USD $TNX TLT AN DLTR ITB SHOP RH

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 July 12

  • Monday – Light….Couple of FOMC speakers
  • Tuesday – NFIB Sm. Biz Optimism; CPI ; Redbook; 30yr bond auction
  • Wednesday – PPI final; Atlanta Fed Inflation expectations; Oil inventory; Jerome Powell Capitol Hill Noon
  • Thursday – Jobless Claims, Philly Fed MFG; Empire State MFG; Import/ Export numbers; Industrial Production; EIA Natural Gas Inventories, Jerome Powell Capitol Hill 9.30am; EIA Crude Inventories, Consumer Credit
  • Friday – Retail Sales; Business Inventories; Consumer Sentiment

CPI Shocker

CPI came in with an ultra hot print of 5.4% YoY inflation yesterday. The market initially shrugged that off in early trade but during the 1pm hour, the 30 yr bond auction got spooked, resulting in a messy auction.   So rates rose sharply in the afternoon causing equity markets to wobble.  What I found fascinating is that the groups you’d expect to benefit from rising rates did not bounce. Cyclicals, Financials, re-opening names, most industrials all finished red.  Even IWM that is loaded with Regional Banks and cyclicals finished on the dead lows. From the charts below you can see that rates $TNX is back testing the breakdown at 1.41% . The corresponding TLT chart shows price back-testing the 200ema from above and the uptrend line.

I have taken the opinion that the market will fade the rate move and bring in back down toward 1.3%.   THis would hold the bid in tech and also boost TLT.  Much of this opinion is based on the fact that cyclicals and financials did not bounce.   Either rates or Equities is lying. I think its rates. I also think we will know pretty quickly if that idea is right.

FATMAAN Earnings

July 20:  NFLX / TSLA   July 27: GOOGL / MSFT      July 28: FB / AMZN / AAPL

Dollar Wrecking Ball

Big move in the USD yesterday. A breakout here would draw a lot of attention.  A rising Dollar can wreak havoc on EEM, commodities, precious metals, and large multi nationals. Something to watch carefully, even if you don’t trade it directly.  The short Dollar trade has been crowded.  THe Dollar may be set up to squeeze out the last of the shorts for a complete reset.

About Bond Rates and TLT

The 30 year bond auction fail yesterday jacked rates. You can see on $TNX that rates are back testing the breakdown at 1.4%.  I am positioned for the market to fade this move. Details in the video. JPOW will probably influence the trade during his testimony beginning at noon today.  TLT in the lower chart is back testing the 200ema from above. I am long TLT against 144.

Details of the trade in the video.

A Simple Bull Market / Bull Stock Checklist

Being a fear-monger is popular. Bearish tweets and doomsters are more widely followed than a tweet saying “stay long”.  Use this simple checklist to tell if the market or a particular stock you follow is in bull mode.  THe list is not intended to be the end-all checklist, but if you find  yourself saying yes to most of the questions, you can certainly come out from under your desk and delay subscribing to “Doomsday Prepper” magazine.

  1. Is Price at an All-time high?  All time highs are bullish, not bearish
  2. Is price above the 8ema and 20ema?  Price above the fast moving averages is as bullish as it gets
  3. Are the ema’s bullishly stacked? if from top to bottom the 8 is above the 20, 20 above the 50 and 50 above the 200 tells you the trend is higher and in bull mode.
  4. Is the slope of the moving averages positive?  If the moving averages are tilted positive and rising; its bullish
  5. Have any trend lines been violated?  Draw a trendline connecting the lows of the recent trend. As long as price stays above, its bullish. If a trendline is broken, pay closer attention.
  6. Are the indicators operating in their bullish regimes?   If RSI is above 50 and PPO momentum is above the zero line, the indicators are bullish.

Use these simple questions to ally any fears you have about the market or favorite stock but confirming it’s bull market status.

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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