Before the Bell June 18

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Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA SMH CAT LPX PYPL NEWR AMD CRWD

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 

No Earnings are scheduled for today.

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

Consensus Calls Pummeled

The Post-FOMC fallout and volatility hit markets yesterday in a big way as previously consensus calls were destroyed.

Consensus Calls

  • Short $USD   >>> THe $USD has put in 2 power candles post FED
  • Short Bonds / TLT ( rising Rates )   >>>>> Rates popped after the FOMC but yesterday they faded 90% of the move and rates overall have been falling since the 1.75% peak 6 weeks ago
  • Trades that have been wrong Post FOMC
    • Long Oil & Commodities
    • Long Reflation Trade / Inflation Trades
    • Long Industrials, Financials, & Cyclicals
    • Long Precious Metals
    • Short Bubble Stocks
    • Underperform Tech / FATMAAN

The trick now is to determine if these post – FOMC moves will turn into durable trends or ultimately be proven to be convincing head fakes.

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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