Tickers: SPY QQQ IWM FB AAPL TSLA MSFT AMZN GOOGL NFLX
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
Major earnings week ahead as FATMAAN reports.
Wall of Worry
Prices near the highs are bullish, not bearish. Despite a ton of things you could worry about ( Taper, Energy nightmare, Inflation, Supply chain meltdown, Covid, Fiscal Cliff, looming debt limit impasse, China tensions, Interest rates running ) the evidence says to stay long at least until the FATMAAN earnings are out and we see what the reaction is. No doubt they’ll all blow it out of the water, but all that matters is the reaction. What I am watching most closely is the high valuation names as interest rates rise. I’ve expected weakness, but have not seen it. I think a good broad-based measure of how its going is the 50ema pivot regardless of whether we are talking about an index, FATMAAN, or individual name. Above keeps it all on track. A break below shoots up warning flares.
Macro Data Releases Week of October 25
- Monday – Chicago Fed Activity index; Dallas Fed MFG index
- Tuesday – CaseShiller housing index; Multiple Housing data points; Consumer sentiment; Richmond Fed Mfg Index; Money Supply at 1pm
- Wednesday – Mortgage applications; Durable Goods; Intl Trade; Retail inventories; Wholesale inventories, Oil inventories, 5 yr bond auction 1pm
- Thursday – GDP, Jobless Claims, Pending home sales; NatGas inventories; 7 yr bond Auction 1pm
- Friday – Employment Cost index; Personal Income; Chicago PMI; UM Consumer Sentiment
Market Insights
FATMAAN Charts
Mon FB/ Tuesday MSFT / GOOGL / Thursday AMZN / AAPL reporting earnings this week. Aside from the overall importance of these earnings for the market due to the Cap Weighting of these names, Traders can key off the lower-time frame pivots and be ready for the possibility of a pre-earnings run up to the print. My process calls to exit prior to the print but you make have a different strategy. If you do hold through earnings, make it a modest bet that cant materially hurt you.
$FB
Battling headlines, but fundamentally a cheap stock. $322.50 is your pivot and the stock reports after the bell today.
$MSFT
Price at the ATH’s. Stay long against the channel. I’d be concerned about a break below $307.50, but a move below $305 would put price back below the breakout level which is something you never want to see if you’re long.
$GOOGL
$2750, near the 50ema, is your pivot. Bigger gap overhead is available to fill. Key downside support levels marked.
$AAPL
Nice flag structure after a fast run up. A break higher targets a move back to the top of the range. Use 148.50 as your pivot.
$AMZN
Price has pulled back 50% of the recent advance. $3350 is your key pivot. With earnings Thursday AMC, a little hard to envision a wholesale sell off before then but the structure is definitely there to backtest lower support levels.
$NFLX
Racing to all-time highs. Tough to get long here with new money but if you are already in, no reason to sell. Stay long.
$TSLA
Breaking to All-time highs. Any back test of $880 looks like a buy.
More on ESG ( Energy Stops Growing )
Oil inventories being depleted even as prices are rising.
Rig Count less than half 2019 levels despite oil prices at 8 year highs. You can’t get a supply response with no holes being punched in the ground
The chart shows how the US economy is far less energy intensive than it was during the energy shock of the 1970s. Thus as energy prices rise, it will have a much less detrimental impact than was experienced in earlier periods
How the energy crisis cascades into a food crisis
Faced with exploding power / electricity costs, the EU decides to double down on wind & renewables as the solution. A famous philosopher once said, if you find yourself in deep hole, stop digging. Euro greenies digging faster….. Read about it HERE
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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