Before the Bell Nov 4

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

FOMC Recap

JPOW and the FOMC went right from the well-telegraphed playbook.  

  • Beginning a $15B taper immediately followed by another $15B predecided for December; then month to month with flexibility to speed or slow the taper.
  • FOMC surprised by strength and persistence of inflation.  Stand ready to combat if necessary.
  • Conceded that run-off of extended unemployment benefits did not accelerate the return to work. Labor markets remain ultra tight.
    • Thinks Jury still out of it the present labor pattern is the new normal
  • Trading scandal
    • Received several questions, but handled well, unlike September meeting where he was nervous and defensive.
  • Overall
    • Well communicated plan
    • I like JPOW’s communication style.  Humble and Plain-spoken….I like that.  I think it will be a loss if he is replaced. He has quickly learned the job and is getting better at it.  As for policy, I cannot say. It’s above my paygrade.  And for my money, if somebody is going to screw it all up, I’d like to at least understand the how’s and why’s.  With Yellen and Bernanke, I knew neither.

Market Insights

Seasonality :  So far so good. The market behaving well within the back drop of strong seasonal tailwinds

$TSLA  Getting that GameStop Feel

The TSLA options market and price action is getting pretty crazy and has a GameStop feel to it. Maybe because we are just coming off a day where $CAR went from $150 to $540. I dont think there is really anything to do other than to realize that if you are trading it, you are in a game. Play small; within your trading experience and account size. Never get so carried away with yourself that you let one position become so large that if it goes the wrong way you are wiped out.

Watch the Oil / SPX relationship

Oil and he SPX have a long-standing symbiotic relationship.   They like to directionally move together. Not sure exactly why, but maybe it is linked to expanding demand and general signal of a growing economy.  Oil had a pretty big wobble yesterday, off almost 5%.   THe second chart shows oil and the SPX beginning to diverge. It is not dramatic, but something to have on the radar screen.  Charting oil and SPX on the same chart is relatively easy on most platforms. I recommend recreating the chart and putting it in your reveiw deck.

The Russell

The breakout in IWM is no longer a secret ( we’re not the only one’s with charts )   Breakouts after year long consolidations are often very powerful so now we wait and watch to see what kind of follow through we get.  Panel 2 shows IWM vs QQQ.  If the chart breaks out it will mean small caps are outperforming the Q’s.  A tough ask, but we’ll see.

More on ESG ( Energy Stops Growing )

Nuclear is no longer a secret 

Climate activists, media, and traders are all re-discovering nuclear and figuring out you need Uranium to do it.   China’s bombshell that it is embarking on a $440B  / 150 reactor / 15 year   Nuclear build out blew the roof off any remaining camouflage off the Uranium trade.

  • As a thought experiment, think of our infrastructure bill at $1.5T  plus the social spending bill that I will pencil in at $2T for a $3.5T total spend.   China told you it will build 150 reactors for about $500B.    Think of how far we could go toward both energy independence and CO2 reduction if we too were to devote 1/3 of our spend on clear energy?  What would you like to see done?

Nuclear vs Wind / Solar cost comparisons 

  • Remember, the type of energy from each of the above is different.
  • Nuclear provides 24/7/365 baseload, carbon-free power.   Baseload power keeps the lights on no matter what.
  • Wind / Solar provide supplemental power to the grid.
  • As the UK and EU have found out, if you do not have reliable, baseload power, you are in a heap of trouble.

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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