Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA SMH SNAP PINS CSCO CRWD PANW CAT YETI ATVI
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
Earnings are winding down but still a few names to watch. ORCL, LEN, ADBE, SWBI
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
JPOW and Quad Witching Headline the Week
THe FOMC is set to present their policy statement on Wednesday at 2pm. Inflation, asset purchases / taper talk, and the ballooning Reverse Repo Market are sure to be major topics of discussion. THey have already announced that they are going to back off purchases of corporate bonds. They will probably review that as well. As I said in earlier commentary, I think they hold off on any major policy shift until Jackson Hole in Mid August. THat scenario favors rates at the low end of the trading range until then and thus a window of opportunity for Tech and bubble stocks to rebound. Quad Witching is Friday. There will be lots of forces at work to make as many option holders as possible lose. THat would mean a very tight, compressed trading range for the week.
THe wild card is a JPOW gaff. So in that respect, we need to be ready for anything while always keeping in mind that the first knee-jerk reaction to the FED statement is usually fake.
Re-Posting – Thoughts on Trading the Meme Names
I’m not one to tell you not to gamble, but a few thoughts if you decide to jump in.
- Treat all trades like lottery tickets. Expect to lose it all. Dont use monies that if lost, will put your trading account or worse at risk.
- Watch overnight Risk. One in the hand is better than 2 in the bush. Don’t underestimate how deep or severe an overnight rug pull can be. Consider taking wins when you can.
- Market Makers are paid to Win. These guys are no dummies, They’ve jacked option IV to the moon making options incredibly expensive and thus harder to win. Make sure you know your risk / reward profile before to dive in. For instance, I priced some $25 strike PUTs in AMC a couple of months out. They were $25. So if AMC went to zero, I would get my money back. Not the kind of trade that makes sense.
- NEVER SELL NAKED CALLS or PUTS. While it may be super tempting to sell vol premium at the jacked levels, selling naked options exposes you to UNLIMITED RISK. If you sell anything, it must be a spread to limit / define your risk.
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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