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 – Commit to the Long Game
Quickly decide if you’re a “Trading Tourist” or if you plan to stick around. Many have confused being in a bull market with being a good trader. Junk entries are bailed out because stocks always go up. This market is getting tough and if you’re not committed to a process you’ll lose all your money. Recall my friend in the dotcom era that ramped $250K to $12M and back to zero. It can happen fast. Look into the Mirror. For some, deciding you’ve been a Trading Tourist is the most powerful assessment you can make.
The long game
- Develop your craft
- Build your process.
- In the upcoming market, if you can’t make money on the short side, the best thing you can do is go to cash and wait for a durable low to redeploy your assets.
- Trade small while you truly learn to trade
- Dont quit 3 feet from Gold when the going gets tough; keep going!
- Honor stops.
- Preserve capital at all costs. You can’t make money if you’re locked out of the casino.
- The most important thing is commitment and intention. Becoming a long-term market participant is difficult but definitely doable.
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
There Will Be Blood
The multi day rally Retail is beginning to fall apart beginning with a doomsday report from defensive retailer Walmart, and now just out, an equally bad report from higher end retailer Target. Inflation is digging in on the consumer and they’re pulling in their horns on spending as they move to an “essentials only” mindset. I expect further pressure on XRT and the restaurant sector. If premier retailers $WMT and $TGT cant figure out the mix for consumers, how can less sophisticated retailers in more discretionary segments hit the nail on the head? Cant see apparel names and restaurants escaping this downturn. Today its all about last THursday’s lows. We tagged it in the premarket. If it can hold during the regular session, the bulls cling to life. If we break the prior lows, it opens the door to more selling. Then its a matter of if we waterfall sell or just a steady grind lower. Be careful out there. Reduce position size and honor stop losses. If you honor stops your losses will be contained.
Saxo Theme Basket Performance
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 Thursday / Friday bulls suddenly lose their conviction.
SPY Daily
SPY 1 hr
QQQ Daily
QQQ 1hr
IWM Daily
IWM 1 hr
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