Before the Bell June 15

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Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA SMH ITB FCX LPX

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

TECH CHARGE

Money is quickly rotating out of the reflation / re-opening trade and into Tech with lower rates and subdued inflation fears being the primary drivers.

What’s Working: Bubble Stocks….big dreams but losing money Stocks, ARKK Complex,  Solar and EV names percolating, FATMAAN complex FB, AAPL, AMZN, GOOGL  leading with TSLA and NFLX lagging but looking better; Meme Stocks…the crayon eaters continue to make runs at random stocks ranging from Wendy’s and prison stocks ( GEO ) to the staples like GME and AMC. As long as the market is flush with liquidity these guys will remain in business. Trade the names as you wish.

What’s Not Working:  Cyclicals, Financials, Industrials, Base Materials, and Commodities

If JPOW succeeds in holding it togther ( no new tapering talk, no gaffs ) my expectation would be for an extended move into tech.  Why?  If JPOW continues to convince market participants that inflation is transitory, then there will be little to no impetus for rates to rise. That should give tech a nice backdrop to advance further.  Also, we should expect another hot inflation number in early July. But we’ve had 2 consecutive hot inflation prints already. THe first one roiled markets, the 2nd one had no effect. Going forward, a July hot inflation number will be already baked in. It wont surprise anyone.  And if it is a downside surprise, then cyclicals and re-opening names will get killed even more.

FOMC Positioning

Do a double check on your risk positioning ahead of the FOMC.  I’d say either stand pat with what you’ve got or back off a little. I see zero reasons to be piling into New swing positions ahead of the print, and don’t forget we’ve got quad witching Friday.

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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