Before the Bell June 21

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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

My old counselor George was always pounding the table about controlling our “Reactivities”.   It’s not what happens to you that matters, its the way you react that matters.  Life amidst constant drama with your hair always on fire will wear you and those around you down. Step back; breathe; calm the mind.  The past several weeks of market action have been tough for pros and retail traders alike. Trying to make it all back by Friday is probably the worst reactivity imaginable. Take things slow and easy. Get some baby wins and re-build confidence by getting back in sync with the market.  They’ll be a better chance of making sustainable progress.

  

 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

Macro Data Releases Week of  June 21

  • Monday – Holiday
  • Tuesday – Chicago Fed; Existing Home Sales
  • Wednesday – Mortgage Applications; JPOW Speaks 9.30am; 20 yr Bond Auction 1pm
  • Thursday – Jobless Claims, Current Account; JPOW speaks 10am, NatGas & Oil Inventories 10.30; 5 yr TIPS Auction 1pm; Fed Balance Sheet 4.30pm
  • Friday – New Home Sales; Consumer Sentiment

Note:  There’s a Parade of FOMC speakers this week including JPOW twice, and at least 2 Fed heads talking each day. 

Bombed out Bounce

After a hellish 10 days of relentless selling, futures markets are seeing a 2% bounce from the Friday close into the 3 day holiday weekend.  We’ve been oversold across a wide range on metrics, but as we found last week, those metrics are not of much use when panic selling takes over. Literally nothing was up last week. Now the set up is treacherous. A 2% pop during a low liquidity holiday weekend does not inspire a great deal of confidence. Be wary of the big gap below that will result of the big green open. May be a chance for one last round of selling below we head up on a sustainable bounce.  Buying a lower gap fill would be a very objective long against the Friday close. Let’s see how the morning progresses and which way they break price on the open.

Capitulation Zone Factors

  • Bear Sentiment highest since 2011
  • Thursday reported the 2nd biggest sell program in a year and the 4th biggest of all time
  • Reports of no-bid markets in High-yield
  • 5  90% down days over last 7 sessions. Its never happened since 1928

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.

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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