Before the Bell June 7

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Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA SMH Copper, Coffee, Lumber, OIL, 5 trade ideas

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 

 

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

 

$NYMO / $NAMO   Upside still available

Despite the strong close to the week, neither the NYMO or NAMO are overextended  / over bought.   Taken together, they say there is still room for the indexes to advance.

Trade Ideas

IRTC – Special Situation

THe CEO is quitting after only 6mo on the job. Did he discover the situation even worse than he imagined when he took the job?  If price breaks 60 there won’t be anyone home to save this. Set your alarm for a duration short.

Bracket Trade Set ups

Follow price out of the bracketed range. You can also trade within the range taking positions at the low and high side of the bracket. Otherwise set your alarms at the bracket levels for either a breakout or breakdown of the range.

$ROOT – Auto Insurance Disruptive Fail

According to Insurance regulators, ROOT has 4x the number of consumer complaints than expected for a company of its size. Their program is to suck in clients with low-ball rates, then aggressively raise rates soon afterward. To make it worse, they make it almost impossible to cancel your policy.   The roach motel program.  I think this is heading lower. I’d be a motivated seller if price can make it to the 50ema. I think dreams die there.

$OTIS – Going Up

Broke out from a $3 consolidation range on Friday. Get long against 79.

$YETI – Poised for higher

Alarm the consolidation range between 82.50 and 90. I’d be a buyer either on a back touch of the 50ema at 82.50 or on a breakout above 90. On a breakout, I think this finds 100.

Upgrades and Downgrades

Clear Sailing?

While I never like to give the “all clear” signal, I think the bias should be for higher prices.  THe liquidity is still there, price has bounced off the lows and have recaptured key levels, plus I dont see any sizable negative catalysts near term.  THursday we have the CPI print. Most folks are anticipating a hot number so it will be hard to shock the market. THe next potential catalyst is the FOMC meeting next week.  Until then, I want to lean bullish but with stops nearby in case i am wrong.  I think any dips wont last long and will be bought.

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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