Before the Bell Nov 3

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.

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 1

  • Monday – PMI MFG / ISM Index, Construction spending
  • Tuesday – Vehicle sales, Redbook, FOMC meeting kickoff
  • Wednesday – ADP, PMI Composite, Factory orders, ISM services, oil inventories, FED Announcement 2pm followed by presser at 2.30
  • Thursday –  Challenger Job cuts, Intl Trade, Jobless Claims, NatGas inv.   OPEC+ MEETING
  • Friday – October Jobs Report

Market Insights

 

The Great Taper

So now we are at an inflection point in FOMC policy from full-on QE toward a transition off of the juice.   THe baseline assumption is for a $15B a month taper.  I believe that is what is priced into the market.  A faster taper of say $20B / mo would be perceived as hawkish.  $10B/mo would be dovish. Also, as always, Powell’s comments during the Presser will be closely watched with every word parsed, especially comments on inflation, rate hike expectations etc.

Trading the announcement

  • In the hours ahead of the FOMC announcement, I don’t think it makes a ton of sense to load up on risk.   Manage what you have and watch the market reaction afterwards.
  • Should there be some big knee-jerk reaction on the announcement, remember the rule of thumb.  The first move is usually fake; dont get too panicky with a big red bar or too excited with a big green one.
  • Powell has gotten much better in these pressers and announcements. No gaffs or curve balls.  My base case is no big reaction and bull conditions to remain in the market.

More on ESG ( Energy Stops Growing )

If the world wants higher oil, it will get it.  If you had any doubt about oil going higher, the fog should be starting to clear.  The politicians and the world’s elite have clearly decided that electrification and EV’s are the future.  At COP26, speaker after speaker are using rising energy prices as the incentive to move faster.  Higher legacy energy costs make green energy sources / solutions more economically competitive.  What’s missing of course is that the middle class and poor will will pay a disproportionate share for this transition and face a lower standard of living because of it.   Separately Bank of America is out with a $120 call on oil.

China’s Nuclear Build-out. 

  • China is planning to spend $440B to build 150 reactors over the next 15 years, more than the rest of the world has built in the past 35.
  • That my friends is called an energy policy.  Read about it HERE
  • Got YellowCake?   No, Uranium won’t go up in a straight line, but they’ll be a bid under it for a long long time.
  • Pure Opinion:  I’d like to see the US aggressively embrace small modular reactors and aggressively migrate coal to NatGas during the transition. Continue to utilize wind / solar but with the recognition that those are not appropriate / capable of base load power.

Pathetic

  • Pre-covid the US was energy independent until we weren’t
  • The lack of supply response is a direct result of public policy and ESG mandates.
  • To me, it’s sad that the USA has been reduced to pleading to other countries for something we have under our own soil.

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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