Before the Bell Nov 23

Tickers:  SPY QQQ IWM FB AAPL TSLA  AAPL AMZN NFLX GOOGL SMH ZM  / Oscillators &  Breadth

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 

Although earnings season is quickly coming to a close and we have a shortened holiday week, there are still a few marquis names on he board for this week including: ZM / DKS / DLTR / DE / FUTU / ADSK / GAP / JWN / HPE / DELL / AEO / ANF

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- 1.5x to reduce run time without loss of clarity.

Find the video HERE

Macro Data Releases Week of November 22

  • Monday – Chicago FED; Existing Home sales
  • Tuesday – Flash PMI; Richmond FED; 7yr note auction 1pm
  • Wednesday – Big Day……Durable Goods; GDP; Jobless Claims; Intl Trade; New Home Sales; oil inventory; Personal Income; Consumer Sentiment; NatGas Inv.
  • Thursday –  Holiday
  • Friday – Nothing

Suddenly Risk Returns

Risk returned yesterday. Just as the announcement was made that Jerome Powell was re-nominated the FED chair and Lael Brainerd as Vice-Chair, the market staged a sharp downside reversal.  Market Observations

  • Lots of nasty bearish engulfing candles out there.  THis is when a big red candle “engulfs”  both the high and low of th previous day.  Its normally bearish but for confirmation, you’d expect tody’s candle to be red. A green candle today would dig into the bearish narrative.
  • Breadth is deteriorating as shown by RSP / QQQE losing relative strength  ( see discussion below )
  • The oscillators continue to diving toward oversold ( discussion below ).    Be careful trying to go net short here with the oscillators already at near oversold rallies.  It’s a perfect set up for a bear trap.  Getting the whole world to pile in short w/ NYMO at neg 60 or lower, just in time to get your face ripped off.   I think its ok to have hedges on to protect long book because any reversal would benefit your longs.
  • Seasonal tailwinds favor a year-end melt up.   November – December is typically 2 of the strongest months on the calendar
  • FATMAAN reversals.  MSFT, FB, AAPL all saw big reversals and dumps into the close.  I mean MSFT reversed $10.  You dont often see that in a mega name and is cause to sit up in your chair and pay attention more closely.
  • TSLA as lynchpin.   I think the canary might be TSLA.  It lies in the intersection of speculation and cap-weighted names.  Watch that $1000 psychological level. A big break and hold below may signal a risk-off more broadly.
    • High Valuation names are struggling as traders preferring tried and true names with solid earnings support.
    • We discussed the ARK Invest complex being weak despite a raging bull market in 2021. IMO this will be the first area of market to have a major breakdown is there is one.
    • Watch as a canary, even if you don’t trade it
  • Small Caps ( IWM ) are currently below it’s breakout level of $233.
      • Watch the 50ema at $230.50.  It’s gotta hold here.  Nothing good will come of a move below the 50ema.
      • A move back into the prior trading would be a bearish move.  That too should be watched as a canary in the sense that if most stocks falling under the surface that would not speak too well about the cyclical recovery
  • Rising Bond rates and USD
    •  The $EUR is 62% of the $USD index. As the Euro craters, it adds juice to the $USD Advance
      • A strong USD is kryponite for commodities and precious metals; $USD also getting safe haven bid.
      • Gold / Silver collapsed yesterday. I will study the charts nd circle back w/ more detailed analysis.
  • Biden Today at 2pm w/ inflation themed address
    • Expected to announce a release of 35-40M barrels of oil from the SPR.
  • Post November OPEX volatility.  After a monthly OPEX there is an increased chance of added volatility.
  • BOTTOM LINE:
    • Not a time to panic, but close attention to downside levels is warranted.
    • Bearish divergences have been warning for a while of a potential reversal
    • We need to see if the dipsters pile in and where.
    • Be careful trying to bottom tick names.
    • I think high-valuation names are going lower.

The Oscillators continue to dive toward oversold

It’s bizarre to fathom being almost oversold with the indexes at /near ATH’s.  I think the key lies with the panels above.  THe average stock within the market has been correcting while the mega-caps mask what is really going on.

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

 

Get inspired, empowered and prepared.

Join us!

As the host of Trader’s Profit Compass, I work hard to inspire, empower, and prepare aspiring traders to face the markets with fortitude, quiet confidence and inner calm. It’s a protein-rich, sugar free environment without ego or judgement. While I can’t promise that joining our group will change your life, I’d like to think it will help your trading. Give it a spin!  Nothing to lose and potentially much to gain.

Our group of aspiring traders are into active swing trading using technical analysis to find objective, high-probability,  low-risk trades.  Using these processes we’ve been fortunate to be winning; not perfect but winning. If that is appealing to you, join us!  I’d like to think you’d benefit from the work.  You’ll get premium  content 6 times a week including a copy of my Daily Profit Compass, Weekend Profit Navigator, along with other actionable content delivered directly to your mailbox. You’ll even get an invite to our new trading room on SLACK.

Registration is simple and FREE   Visit our homepage  HERE

 

Spread the word?

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest

Leave a Reply

Your email address will not be published. Required fields are marked *