Before the Bell July 26

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Tickers discussed: SPY QQQ IWM FB AAPL TSLA MSFT AMZN NFLX SMH AMD TXN

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 

Massive week ahead with everything on the line for QQQ and SPY as all of mega-cap Tech reports.  If the earnings reaction is positive, we go higher. If they dump these names we go lower. It’s just math………..the FATMAAN names are 40% of QQQ and 25 % of SPY

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 26

  • Monday – New Home Sales; Dallas FED,  3mo, 6mo and 2yr bond auctions; China / US Trade talks off to a rocky start
  • Tuesday – Durable Goods, Case-Shiller, Consumer Confidence, Richmond Fed, FOMC meeting starts, 5yr auction
  • Wednesday – International Trade Numbers, Retail / Wholesale inventories, Oil inventory; FOMC Announcement 2pm, JPOW presser 2.30pm
  • Thursday – GDP, Jobless Claims, Pending Home sales, EIA NatGas Inventories,   7 yr Bond Auction
  • Friday – Employment Cost Index, Personal Income, FOMC Bullard at 9am, Chicago PMI 9.30am, Consumer Sentiment 10am

Pivotal Week

Lots of moving pieces this week. I will be leaning bullish until Tuesday night, but then tactically defensive heading into FATMAAN earnings and FOMC statement.

Key Market Thoughts

  • Falling Rates are still in control; Use the TLT uptrend line as a pivot level
  • This environment favors tech with FATMAAN leading the way
  • This week carries a ton of risk in both directions.  JPOW +  All of FATMAAN reporting could result in either a moonshot or a rug pull of epic proportions
  • Further weakness in China Tech may spur additional money flows into FATMAAN and be a stabilizing force.

Fade Global Covid Variant Fears

Charts from Cam Hui and Callum Thomas showing high-frequency economic data show the Covid Variant has not yet changed behavior. THe economic re-opening is in tact and unless / until we see the numbers roll over, the media-driven doom loop on the Covid Variant seems like more hype than reality.

Apple Mobility tracking data shows positive trend and no “Delta Rollover”

TSA Travel numbers closing on 2019 numbers and have not rolled over

Movie going trends are headed in the right direction

Similar charts could be shown for Hotel occupancy, Gasoline demand, and restaurant reservations. America is on the move. Could this all change in 2 weeks ?   Sure.   But for now, there isnt much evidence that Covid Variant fears are changing people’s behavior.

Use TLT as a confirmation Trigger for cyclical / re-opening entry

If TLT loses its uptrend line, its 200ema, and certainly its 50ema in green, it will be a sell signal in TLT and a confirming sign rates are rising. A rising rate environment is bullish for cyclicals.  Have this trigger alarmed before the FOMC Wednesday.  I would not enter the trade until AFTER JPOW delivers his message and the FOMC knee-jerk reaction settles out.

 

 

Regime Shift?

If / when the TLT triggers above, these are the areas I would look for alpha as rotation to cyclicals takes place.

Rising Rate Environment Areas of Interest.

  • 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.

FATMAAN Earnings

July 26: TSLA       July 27: AAPL / GOOGL / MSFT      July 28: FB      July 29 AMZN    All earnings after the bell

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

SPY 2 Hour

SPY 30 Min

QQQ Daily

QQQ 2 hour

QQQ 30 min

IWM Daily

IWM 2 hour

IWM 30 min

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