Before the Bell Jun 28

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

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

 

If you are feeling pain on a chart or in your life, it implies rigidity and unwillingness to change.   Learning to be flexible and to become that “leaf on a stream” takes time and practice. The key I think is identifying the source of the pain. Is there something you are clinging to?  Often times when it comes to charts / trades, we cling to our ego in an attempt to have the market prove our thesis correct. If this describes you, strive to make, then execute mechanical trades with very little subjectivity. For instance. You buy a breakout and set a stop a little below the breakout level.  If price comes back down below the breakout and hits your stop, you’re wrong.  Close it and either re-alarm it, or move on. Do not contort yourself with a rationalization that the trade is right. Be mechanical about it.  

  

 Earnings

 

Today’s 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    Will return

 

Macro Data Releases Week of  June 27

  • Monday – Durable Goods, Pending homes sales, Dallas Fed, 5 yr note auction 1pm
  • Tuesday – Intl Trade, Retail & wholesale inventories; Consumer Confidence; Richmond Fed; 7 yr Notes 1pm
  • Wednesday – GDP 8.30. ; Jerome Powell 9am, oil inventory
  • Thursday – Jobless Claims; Personal income / outlays; Chicago PMI, NatGas Inv.
  • Friday – PMI MFG, ISM MFG, Construction spending.

 

Quarter End Test Incoming 

At the end of Q1 we saw a decent run up to the end of the quarter. Hopefully we will see the same here in Q2 as month-end rebalancing flows should favor some buying. Still leaning long and hoping for some follow through up to resistance at 400 on SPY.

Trading this rally

  • I want to continue to stay long this new rally and not try to outthink it.
    • I consider this a bear market rally that will eventually fizzle and roll over.
  • Have a short leash
    • Bear market rallies cannot be trusted.
    • Roll and Protect positions that go into the money by rolling to higher strikes and scraping off profits.
    • Be aware of the key levels on the daily chart even if you are trading lower timeframes.
      • Often a key moving average or downtrend line will stop a rally in its tracks at least for a period of time.
      • Trade level to level, making price prove it all along the way.

Macro Framework Spring / Summer 2022

Find the Blog Post HERE

Earnings Season & Bracket Trades

As earnings season kicks into gear, a reminder that this is prime time for Bracket Trades. Bracket Trades are those trades created when a stock gaps up or down from a news driven event. Bracket Trades are set up as “2nd day trades” where you alarm the high and low of the prior day’s trading range, then patiently wait for price to either break lower or higher from the range.  You then follow price out of the range. I will do my best to help identify them for you, but you can easily find them yourself by doing a sort for “GAP ups” and “GAP Down” on your trading platform.  I add additional filters for only stocks above $10 and at least 500,000 shares traded. You can add additional filters to cut down the sort further. Generally speaking, stocks favor continuing in the direction of the gap higher or lower.

You can find out more about Bracket Trades in the video Run the Player at 1.5x      HERE.

 

Equity Themes

Bitcoin / QQQ divergence

After acting as proxies for one another for months and months, BTC and QQQ are diverging.  THe question is, does BTC catch up or do the Q’s catch down?

 

HYG / SPY Divergence

Here too we have important divergences to be aware of.  Hi-yield bonds ( HYG ) have been closely tracking SPY’s decline for months. This time however, HYG did not bounce with SPY.   Watch it closely. Bonds are usually the ones that are right.

 

JULY FOMO?

 

Managed Healthcare

$CI and $HUM are trading at the top of their respective ranges and threatening to breakout. Bulls and bears alike should pay attention here. A breakout that holds offer nice upside in both names. THat said, if the market rolls over, getting a short entry nears the highs in these names should offer some nice downside.    Healthcare in general has been outperforming.    XLV / XBI / large cap pharma

 

INDEX CHARTS

Use the following pivots and levels in your active and swing trading.

SPY Daily

 

SPY 1 hr

QQQ Daily

QQQ 1hr

IWM Daily

IWM 1 hr

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