Before the Bell June 23

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Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA SMH COST CVNA PINS PYPL DHT NM TWLO CRWD CTAS

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 

A light week for earnings but interestingly a mix of names that could be helpful for gauging certain important sectors.   Solar: PLUG / JKS  Home Building: KBH Global Logistics & ecommerce: $FDX   Global Retail: NKE     Travel:  CCL    Restaurants: $DRI

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

 

FED Concerns Dissolve

Equity Markets moved higher across the board yesterday led by tech and with the FATMAAN complex seeing gains.  THis comes as the turmoil created by the FED last week in the bond market and with the $USD begin to subside. I continue to think that as long at rates settle into a range say between the low 1.40’s and under 1.55% that the environment for equities will remain constructive. So barring a downside collapse or rates racing back toward 1.6% and higher,  equities should be in a sweet spot.

The price action is leading the way.  SPY / QQQ are at the ATH’s with IWM tagging along as rebounds in cyclicals, financials, re-opening plays occur.  Along with the leadership in the FATMAAN names, there has been nice moves in bubble stocks and in the Green transformation space.   If you’re looking for extra beta names to play you can look at the ZM’s, DOCU, ROKU, ARKK complex for ideas. Continue to work the long side until we see a reason not to.

Before I forget we had breakouts in XLY and XLK yesterday so if you prefer trading baskets vs individual names, here would be places to start. Continue to use the SPDR ETF’s to measure rising / falling tides in the individual sectors. Then if you care to, you can drill down for individual set ups.

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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