Tickers: SPY QQQ IWM FB AAPL TSLA MSFT AMZN GOOGL NFLX SMH ARK Complex, market internals
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 – Winners & Losers act differently
Losers: Sells winners and hopes losers reverse and move higher.
Winners: Sells losers and hopes winners continue their advance
Model your trading behavior toward those of consistent winners. That is one of the biggest positive psychological shifts you can make if you consistently behave like a losing trader.
Earnings
Lots of retail reporting over the next few weeks.
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 May 16
- Monday – Nothing
- Tuesday – Retail Sales, Industrial Production, Housing Prices, JPOW speaking at 2pm
- Wednesday – Housing starts, oil inventories, 20 yr bond auction
- Thursday – Jobless Claims; Philly FED; NatGas; 10 yr TIPs Bond auction
- Friday – Rig Count
Junk Data out of China.
Futures were rocking on the open last night until junk data out of China torpedoed them. It’s clear the draconian covid lockdowns are exacting a price on the Chinese economy. Only Xi knows the pain point for opening back up. Keep in mind their covid vaccine blows and they really dont have in place the infrastructure to deal with a massive wave of covid that would put the elderly and other cohorts at risk. Any way, here’s the data.
- Retail down 11%
- MFG down 4.6%
- Industrial Production down 3%
- Fun Fact: Zero EV auto sales recorded in the Shanghai area in April. That’s what happens when leaving your home could result in a 10year stay at Xi’s Fingernail Factory Spa & Resort.
Wheat goes limit up
WEAT is limit up this morning with India announcing a ban on wheat exports. THe thing is, India does not export much wheat to begin with . Speaks to how tight the market is at the moment. LONG WEAT calls
Oscillator Update
Saxo Theme Basket Performance
From the chart we see the familiar “dash for trash” as the most beaten up sectors seeing the highest gains. The ARK complex does a great job of tracking / modelling these various sectors. I find them an easy way to trade the baskets both on the long / short side. Option chains are liquid with manageable bid / ask spreads.
Commodities
The industrial metals have taken a big hit on the demand fears propagating out of the China lockdowns. Bullish longer term but price wise in the short term these commodities and stocks will be under pressure ( FCX / AA / CENX / DBB ) THe Grains appear to be holding up so far in the commodity complex.
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. Added color is provided on the video. Link above.
This week, with May OPEX on Friday, its all about follow through for this emerging potential rally. All the charts look similar in that they printed bullish hammer candles on the weekly, with promising 3 bar reversals on the daily. A red day today would not ruin everything but a very bearish day would certainly plant seeds of doubt in the rally. Wouldnt be surprised if the Thusday / Friday bulls suddenly lose their conviction.
SPY Weekly
SPY Daily
SPY 1 hr
QQQ Weekly
QQQ Daily
QQQ 1hr
IWM Weekly
IWM Daily
IWM 1 hr
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