Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA COST CRWD PINS PYPL SNAP TWLO GBTC
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
Inflation fears fade, juicing Risk Assets
Interest rates on the 10yr dropped a whopping 4% yesterday ( almost 6bps ) to close at 1.478%. 5 yr forward break evens dropped as well signaling the market as this point at least is in the Fed’s transitory inflation camp. That has translated into a fertile environment for tech, both the mega-cap variety and the more speculative bubble variety. Sectors such as EV and Solar were hot. Even money seems to be flowing back into SPAC land. We’ve seen these whipsaw rotations before. Dump cyclicals and financials, pile into tech just in time for them to pull the rug. I dont think its possible to front run these moves. I think the idea should be to participate in both Tech and the Cyclical / financial / reflation side of equities. Make peace with the fact that when tech is running, your reflation trades wont work as well.
Facebook tops $1T
After languishing most of the day, $FB popped 4% in afternoon trade as news hit the wires that the FTC complaint filed against them was dismissed by the judge. The FTC is welcome to re-file the complaint after tweaks if they wish. For now $FB and the rest of mega-cap tech can breathe easier as government regulators continue to fire blanks.
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.
Yields
Yields dropped 4% yesterday and are in the sweet spot for tech between 1.40 – 1.50. Even if you dont trade TLT or rates, watch it for clues on the cyclical / tech trade.
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
We are just shy of tagging $428 which was our technical target from the breakout above the double bottom low back in May.
SPY 30 min
QQQ 2 hour
Price continues to grind higher to ATH’s as the tepid interest rate environment is providing a fertile backdrop for both the mega names but also the semis, and more speculative sectors like EV’s and Solar.
QQQ 30 min
IWM 2 hour
As rates fade, traders fled the inflation / reflation trade dumping energy, industrials, financials and other reopening trades like cruise lines and airlines. Price needs to hold the line at $229 or $227 comes into focus with the 200ema ( 50ema on the daily ) just below at $225.
$IWM 30 Min
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