Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA ARK Invest ETF’s
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 quiet week ahead for earnings but meme name $BBBY and DRAM producer $MU reporting on Wednesday hold some interest. H&M on Thursday should provide a good read on Global Retail.
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
Bubbles Reflate as Jobs and OPEC+ Loom
Interest rates remain to a large extent, pinned down and hovering in the low 1.50 range. In this environment, bubble stocks like ROKU, DOCU, ZM, Green transformation, and ARK Invest ETF funds will do well. If you see rates head higher, then you will see performance in these high valuation names falter. On Thursday there is an important OPEC+ meeting to discuss production levels. Oil is the outlier in the commodity space as it remains at the highs and heading higher, while the rest of the commodity complex has had sharp pullbacks. It turn out SPY and OIL are highly correlated. If oil remains on an upward path it will be supportive of higher prices in SPY. If OPEC pulls the rug, it would not be so hot. We’ve also got the big Jobs Report on Friday which will show us how June went on the jobs front.
Stay constructive with a bullish bias. Feel free to actively trade long / short, but if you’re short, look to cover at support and reverse long. Barring some type of bearish catalyst, hard to shoot against higher prices.
ARK Invest Complex
As we’ve discussed, ARK Invest is highly levered to high growth “bubble stocks” meaning the companies have rapidly expanding sales but are either marginally profitable or are cash flow negative. THese stocks, unlike say Mega-cap tech, are highly vulnerable to interest rates. Higher rates quickly reduce the value of these long-duration plays on growth. As rates have backed off the recent 1.75% high on the 10year, THe ARK family has seen a nice rebound. THe overhead levels of resistance are shown on the charts. If rates stay pinned down, ARK should continue to perform. If rates begin to run on renewed inflation fears, ARK will most likely roll over. THe nice thing about ARK from a traders perspective is that you can trade a basket of names that on their own would have low liquidity. ARK ETFs in general have nice option chains where you can get decent fills which is always a plus.
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
Price is toward the high side of the rising channel. Our measured move target off the double bottom remains $428.
SPY 30 min
QQQ 4 hour
Note the 4 hour view which I dont show very often. Shows the clean breakout from $342.50. If for some reason you swing / position traders out there who are not in the Q’s and there was to be a backtest of the breakout at $342.5 level, you’d want to hit that with a bazooka w/ a stop just below. You can go out 3 -6 months and see if the QQQ can take a substantial leg higher into the back half of the year. Closes back below $342.50 becomes a significant bearish development you’d want to pay attention to.
QQQ 30 min
IWM 4 hour
Here too is a 4 hour view. Clearly shows the 6month consolidation between 207.50 and $233/234 high side of the range. On a breakout above the range, swing and position traders should get long and look for the $25 measured move higher which would target price $257.50 – $260 range. If price gets rejected here, coupled with QQQ & SPY rolling over, The target becomes the bottom of the box albeit, with intermediate targets along the way. Price is at a key spot here at the top.
$IWM 30 Min
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