Tickers: SPY QQQ IWM FB AAPL TSLA MSFT AMZN GOOGL NFLX SMH
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 – Wisdom from 500 B.C.
Deep thinkers from the beginning of time point toward the truth. The question is, when will you believe it and do something about it?
Earnings
Some marquis names this week. ZOOM, BBY, JWN, DKS, NVDA, SNOW, SPLK, BABA, M, DLTR, DG, BIDU, COST, ADSK, ULTA, WDAY,
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 23
- Monday – Chicago Fed; Bostic @ Noon
- Tuesday – Composite PMI, New Home Sales, Richmond Fed, 2 yr Note Auction 1pm
- Wednesday – Durable Goods, Oil Inv., 5yr Bond Auction, FOMC Minutes
- Thursday – GDP, Jobless Claims, Pending Home Sales, NatGas Inv, KC Fed, 7 yr Bond auction
- Friday – Intl Trade, Personal Income & Outlays, Consumer Sentiment, Rig Count
$MTUM Re-balance portends to be impactful
The $MTUM ETF has traditionally been piled into tech stocks because they’ve been the momentum names. But now as tech has stalled, the momentum is in energy and materials. $MTUM is going to do it’s semi-annual re-balance next week. THe key thing to understand about this rebalance is the relative size of the assets. Imagine selling down a position in AAPL that is a $2.4T market cap company and then piling those assets into energy names 1/10th the size. Think a firehose into a thimble. THis could really spark the next leg higher in energy. Certainly big names like XOM and CVX will see inflows. XLE is an easy way to play given XOM / CVX are about 50% of this cap weighted index. On the flip side is the selling of mega cap tech which could be significant and may move the needle. Find and ETF web-site to look at the top components of the MTUM ETF where most likely a lot of selling is slated to occur.
Do your homework on this one. This is a thumbnail of what’s going on. Find the article HERE
Oscillator Update
Normally the week after a big OPEX is a dangerous time for markets. As lots of delta and gamma roll off, markets more easily able to find a new level of trading. THis month-end buying may tilt the balance to the upside. Also note, FOMC $65B of balance sheet QT is slated to start on June 1.
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.
SPY Daily
SPY 1 hr
QQQ Daily
QQQ 1hr
IWM Daily
IWM 1 hr
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