Before the Bell Nov 11

Tickers:  SPY QQQ IWM FB AAPL TSLA MSFT AMZN GOOGL NFLX  SMH GDX  GLD  WTIC  TNX  VIX

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

Macro Data Releases Week of November 8

  • Monday – Clarita and Powell both speak today but nothing much expected
  • Tuesday – NFIB small business optimism index, FOMC Bullard, PPI final,  10 year bond Auction 1pm
  • Wednesday – CPI, Jobless Claims, ATL Fed inflation expectations, Oil Inventories 10.30,  NatGas inventories noon  30 yr bond auction.  Rivian IPO
  • THursday – Veteran’s Day. Governmental Offices will be closed but NYSE will be open; Bond Market Closed
  • Friday – Consumer Sentiment, JOLTs

Inflation Explodes; Gold Follows

Inflation exploded to 30 year highs yesterday. The breakdown can be seen in the graphic. Behind the scenes, bond yields were ripping higher across the curve.  2yr yields were up 10bps, 10yr yields popped 20bps before setting back to 13-14 bps.  Matters were not helped by the 30yr bond auction where seasoned observed noted it was one of the worst they had ever seen. THe bottom line is that real rates are falling.  Real rates are nominal rates less inflation. Given nominal rates are say 1.5% and inflation is running 6% then real rates are around neg 4.5% . Traditionally this is Gold’s wheelhouse. We finally saw a decent move where price broke above resistance and held into the close. This morning we are up another 0.85%.  Hopefully both technical and FOMO buyers will pile into the move so we get some escape velocity.  Gold has really been a widow-maker this year with a lot of fake moves. Time will tell if this one sticks, but I think chances are good.  Inflation will be with us a while and there is a notorious lag getting housing inflation into the headline inflation numbers. Once that kicks in, there may be some staggering prints in the month ahead.

Inflation Themes.

Getting this rotation right wont be easy. You’d normally think to pile into commodities but we also has $USD strength which is a headwind.   I still think commodities will be right, but the move may be choppy. I’d think defensives like Bonds and bond proxies like utilities and staples will do poorly.  Energy, materials  and financials should to well.  But at the end of the day I am a technician.  We’ll be able to see emerging strength and weakness in the charts and react accordingly.

 

More on ESG ( Energy Stops Growing )

Revisiting Coal. 

Being the dirtiest of the fossil fuels, there’s no doubt there is a war on coal.  That said, it’s also one of the cheapest and most abundant.  If oil and NatGas resume their moonshot mode due to supply constraints, I think coal will keep a bid for the foreseeable future.  We should continue to watch and tactically trade tickers like BTU, ARCH, HCC, ARLP etc.

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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