Recently Closed Trades
Recently Opened Trades
No Opened Trades
Latest Activity - All

Weekly Market Preview - February 6th, 2023

Last Week Recap - 

SPY had a weekly range of 400 to 418, closing near 412. It was a crazy week with major events happening all over the place, including FOMC and AAPL earnings. Jerome Powell came in very tame in his demeanor and the bulls took that as an indicator that the Fed pain is starting to subside. During his speech on Wednesday, the market blasted higher and set the stage for the soft landing to carry the momentum upward for a few more weeks. 

AAPL, AMZN, and GOOG all released earnings on Thursday in afterhours. The earnings were not great, and the market seemed to handle the reports pretty well in afterhours. Friday in premarket brought a very hot jobs report that sent the market down to test under 411, but the dip was quickly bought up on Friday. 

The internet is filled with reviews of earnings and FOMC from last week, but I want to concentrate on the jobs report for a moment. One bullish note for the jobs data was that wage rates stayed the same and unemployment ticked lower. The wage data  being flat helps ease the inflation fears for the upcoming CPI report on 02/14. However, the jobs number came in scorching hot (comically hot honestly) at +500k. That helps the DXY gain some momentum which is a bearish sign for tech and commodities. So the jobs report may fuel the next pullback if the DXY can keep the upward momentum it grabbed on Friday. 

My Prediction - 

The market is pretty frothy up here and is ripe for a technical pullback. I am going to be looking at the DXY and seeing if it can hold 103 on Monday. I think there is a chance that we get a vey quick pullback on Monday and part of Tuesday where SPY retests 407. That would clear up some of the technicals and allow for any dip buyers to feel more comfortable to enter. 

I believe the catalyst for the dip buying will be the JPow event on Tuesday turning into a nonevent and the dip buyers show up in full force again. This time they will run the market up to 420 before the CPI report. If we get there before next week, then we will consolidate and slowly grind up. 

As a bear, I hate typing this, but it is what it is. There is no major economic events this week that can cause much fear outside of JPow completely flipping his dovish stance on Tuesday.  He is not going to do that in my opinion with FOMC only being 6 days ago. That would kill all credibility he has left. 


Economic Data this Week (all times are EST)? - 

  • Check the full calendar here. We have a lot of Fed Speakers this week:  stonks.chat/feed/catalysts
  • Monday - Nothing major
  • Tuesday - US Balance of Trade at 8:30am
  • Tuesday - JPow speech at 12:40pm
  • Tuesday - CMG earnings in afterhours
  • Wednesday - A lot of Fed Speakers throughout the day
  • Wednesday - UBER earnings in premarket and DIS Earnings in Afterhours
  • Thursday - No major economic data (weekly jobless claims but not major)
  • Friday - UK GDP at 2:00am (DXY implications/ global recession fears)
  • Friday - UoM Consumer at 10am

Current Positions and Plays -

  • All cash for now. 
  • I am sticking with daily scalps for the time being. 

SPY Technicals - 

  • SPY Technicals - The 30 min and 1 hour are neutral. 4 hour and Daily charts are close to overbought. 
  • SPY has broken above its 200 MA average and the bear market trendline on the Daily chart.
  • SPY Fibs for ATH to June 2022 low - 407 is the .382 line. Next line higher is 421 which is the .500 line.
  • SPY Fibs for COVID low to ATH - We tested and rejected 418 which was the .236. Next line below is 380. 

Percentages from the Highs

  • SPY is approximately -15% (479 HIGH)
  • QQQ is approximately -25% (408 HIGH)
  • DJX is approximately -8% (369 HIGH)
  • IWM is approximately -20% (244 HIGH)

Levels I am Watching

  • $SPY - levels 407 (major), 410, 413, 415, 418 (major)
  • NOTE: I have turned back into a daytrader. I love playing ES futures. 
  • This is not financial advice
0

Stock Market - Week Ahead: Feb 6, 2023 - SPY 400-420 range; Fed speakers everywhere; macro thoughts.

Economic Calendar
  • Monday: Nothing.
  • Tuesday:  JPow in the wild @ 1240; Fed Barr @ 1400; Consumer Credit @ 1500
  • Wednesday:  Fed spakers: Cook @ 0930, Bostic & Barr @ 1000, Kashkari @ 1230 (one to watch), Waller @ 1345
  • Thursday:  Jobless claims @ 0830
  • Friday: UMICH Inflation Expectations @ 1000, Waller @ 1230, Harker @ 4pm

Earnings Calendar
  • Wednesday: DIS after hours only one of interest to me this week

Market Thoughts:

Technicals (Latest):
  • SPY levels:  400, 408, 410, 416, 420
  • 200 MA: 394

Trading Plan (This Week):
  • Current position: I’m holding nothing.  I scalped some NQ this evening.
  • I would happily go short QQQ at 308 and certainly 313
  • I’ll be watching the technical conditions to see when they get worked out before going long
  • I will stay out of the way on Wednesday - Fed speakers all day.

Screenshot 2023-02-05 at 22.07.30.png 243.46 KB


0

Stock Market - Week Ahead: January 30, 2023 - SPY 390-410 range; major data, earnings, and JPow 😱

⚠️This week is absolutely bonkers with all the data that’s coming out.  Buckle up and keep it light. ⚠️

Economic Calendar
  • Monday: Nothing.
  • Tuesday:  Chicago PMI @ 0945, Consumer Confidence @ 10am
  • Wednesday: ADP @ 0815, NFCI @ 0830, PMI - Manufacturing @ 0945, JOLTS @ 1000, FOMC @ 1400, JPOW @ 1430 ⚠️
  • Thursday:  Jobless claims @ 0830, Factory Orders @ 1000 
  • Friday: NFP (Non-Farm Payrolls & Wages) @ 0830, PMI Services @ 0945, ISM @ 1000

Earnings Calendar
  • Monday: Nothing.
  • Tuesday: XOM, MCD, UPS premarket; AMD, SNAP afterhours
  • Wednesday: META afterhours
  • Thursday: AAPL, GOOGL, AMZN, the list goes on and on in afterhours ⚠️
  • Friday: 

Market Thoughts:

Technicals (Latest):
  • SPY levels:  393, 396, 400, 408, 410, 416
  • 200 MA: 395

Trading Plan (This Week):
  • Current position: I’m holding nothing.
  • I’m looking at 408-410 to go short ES or NQ - as long as there’s no earnings surprises.  I’ll use ES options if before Thursday; and normal ES/NQ if after AAPL earnings
  • I expect I’ll be short at whatever price we’re at after AAPL earnings on Thursday night
  • Only risk will be NFP on Friday - but I’m guessing it’s around expectations (they nailed it last time), so +200k

QQQ, daily -- note the RSI peaks.
Screenshot 2023-01-29 at 19.54.27.png 370.46 KB



0

Weekly Market Preview - January 23rd, 2023

Last Week Recap - 

SPY had a weekly range of 387 to 400, closing near 396. The market absorbed the poor retail numbers and had a nice pullback from 400 to 388 on Wednesday to Thursday. It then had a monster rally on Friday to close near 396 on Monthly options expiration. Netflix had ok earnings and pretty good subscriber growth numbers. So how much of the rally was options magic or how much of the rally was actually merited? Time will tell this week. 

The bulls still have a nice narrative building here with inflation coming down, unemployment staying low, and Fed slowing rate hikes. But the retail data from last week did show that the consumer is slowing their spending. That is a key element to the soft landing narrative. There is a lot of front loading happening here by the bulls, but it may spark a continued move for weeks to come. 

The bears recession argument got some more support with the poor December retail sales as well as all the Fed Speakers still signaling that no rate hike cut was imminent. 
I will keep adding this point in all my previews: 
If the market is strong, unemployment is low, inflation is falling, then why would the Fed pause here? IF anything they can keep pounding QT and lower the balance sheet without much fear of the market stumbling. 

So, here we sit again for the second week in a row near the bear market line of rejection and the 200 Daily moving Average. Do we reject here, or breakthrough?

Economic Data this Week (all times are EST)? - 

  • Check the full calendar here:  stonks.chat/feed/catalysts
  • Blackout Period for the Fed until FOMC on Feb 1st. 
  • Monday - EU LaGarde Speech at 12:45PM (DXY implications)
  • Tuesday - US PMI at 9:45am
  • Tuesday - MSFT Earnings in Afterhours
  • Wednesday - No Major Economic Data
  • Wednesday - BA and T Earnings in Premarket
  • Wednesday - TSLA Earnings in Afterhours
  • Thursday - AAL, LUV, and MC in premarket
  • Thursday - INTC and V earnings in after-hours
  • Thursday - US GDP at 8:30am
  • Friday - PCE Data at 8:30am
  • Friday - UoM Consumer at 10am

My Prediction - 

This is going to sound like a repeat from last week, but I honestly think we have the same setup. Wait for a pullback and then enter long for a rally. Microsoft earnings are the main event this week, so that can be the cause of the pullback, or the resumption of the uptrend based on the results. I do not think there is much of a market wide bearish case for TSLA’s earnings. The name has been beaten up so badly already, that there is not much more for bears to take from the earnings imo. 

The GDP and PCE data at the end of the week are minor and should not cause much of a market reaction. I am a bear at heart, but this is looking like more bullish momentum heading into FOMC next week as long as MSFT’s earnings are not abysmal. I still have a rally target for 430 for this run. It may take a few weeks/months. 

Though I am long term bearish, short term bullish, I will not be swinging any core positions. I am having a lot of success scalping the directions each day, so I am going to stick with that. 

Current Positions and Plays -

  • I scalped all week long and played the pullback nicely. My goal is to net 20 ES points a day in scalps, and I was able to do that for the week. 
  • I am sticking with daily scalps for the time being. 

SPY Technicals - 

  • SPY Technicals - The 30 min is close to overbought.  1 hour, 4 hour, and Daily charts are a little higher than neutral. 
  • SPY is right at its 200 MA average and near the bear market trendline on the Daily chart.
  • SPY Fibs for ATH to June 2022 low - 390 is the .236 line. We tested this line and it ultimately held as support. I do not see us testing 390 again until the conclusion of this bear market rally. 407 is the next Fib line higher. 
  • SPY Fibs for COVID low to ATH - 380 is the .382. The next level is 418.

Percentages from the Highs

  • SPY is approximately -20% (479 HIGH)
  • QQQ is approximately -35% (408 HIGH)
  • DJX is approximately -10% (369 HIGH)
  • IWM is approximately -30% (244 HIGH)

Levels I am Watching

  • $SPY - levels 390 (major) > 393 > 396 >  398 > 400 > 403 > 410 (major)
  • NOTE: I have turned back into a daytrader. I love playing ES futures. 
  • This is not financial advice
0

Stock Market - Week Ahead: January 23, 2023 - SPY 393/405 range; bulls in charge.

Economic Calendar
  • Monday: Nothing.
  • Tuesday:  PMI Services @ 0945
  • Wednesday: Nothing.
  • Thursday:  Jobless claims, Goods, GDP, Chicago data @ 0830
  • Friday: PCE, Spending @ 0830, UMich 10am (!!)

Earnings Calendar
  • Tuesday: Some industrials in premarket; MSFT in afterhours (!!)
  • Wednesday: TSLA afterhours
  • Thursday: Mastercard premarket, Visa afterhours
  • Friday: Oil companies premarket

Market Thoughts:
  • Last week:  SPY was 387-400 - my prediction was 390-402 — not bad!  I had a nice week overall, I ticked up against last week.  I’ve been trading almost exclusively ES and NQ.  They’re easier to trade - and hod - than SPX options, so far.  I missed out on untold amounts of money by calling the move, but not holding through it (typically being early and then jumping out at first sign of profit).  I’ve got to believe in the trades more to optimize my profit.
  • Economic Calendar:  Bulls have a clear run until Thursday morning.  Only thing they’ll battle is technicals at 400, 405.  Friday with PCE + UMich will make the market dance.
  • Earnings: MSFT could be a trend setter -  in either direction.  I wouldn’t be caught holding a position into those earnings, but just wait to see what they say.  It’s likely to be bullish event with the layoffs (good for profit), but any strong warnings could go a long ways. TSLA I don’t think matters for bears, will only help bulls. 
  • The move on Friday for SPY/QQQ was impressive, BUT….it was a mechanical day (OpEx for January) and low volume Friday as always.  It was a bull’s dream.  It skipped right over some lines that are normally respected and at 396 (close), it may have to pay its respects to get over that.  We could see a pullback to 393 before it charges on.  If it doesn’t and just heads to 400 again, I won’t be surprised at all.
  • After we see if 396 is is easy to take down - or is tough resistance - then I’m on the bull train for Mon & Tuesday.  The rest of the week, will be data dependent.
  • SPY 396 is also the 200MA
  • SPY range this week (guess): 393 - 405
  • Overall, I remain bearish for the year.  
  • For the short-term however, we’re going into earnings season, there will be more layoffs announced which are good - for now - for companies.  The unemployment numbers haven’t spiked yet and inflation is coming down — so the sentiment strongly favors the bulls. 
  • I’m looking for a run to SPY 420-430 before it gets smacked down hard by rising unemployment and no chance of the Fed cutting rates until end of year at earliest.  New SPY lows are coming

Technicals (Latest):
  • SPY levels:  390, 396, 400, 405
  • 200 MA: 396.02

Trading Plan (This Week):
  • Current position: I’m holding nothing.  I scalped 20 points out of NQ shortly after the open.
  • I’m looking to see what SPY 396 does.
  • If it goes back to 393 I’ll go long NQ.
  • If it jumps right over it to 397, I’ll go long NQ.
  • I’ll be out ahead of MSFT, then decide next move after that.  PCE, same plan.

Screenshot 2023-01-22 at 19.33.15.png 290.25 KB

0

Weekly Market Preview - January 16th, 2023

Last Week Recap - 

SPY had a weekly range of 386 to 399, closing near the highs of the week. The CPI report came in at expectations and the market held all of its gains that it frontloaded heading into the report. 

The bulls have a nice narrative building here with inflation coming down, unemployment staying low, Fed slowing rate hikes, and consumer still somewhat strong. This is creating the goldilocks or soft landing narrative that is not too far fetch. The bulls of course take this theory one step further by saying all this means the Fed will pause or cut rates in a few months. 

The bears argument is centered around a possible recession and notion that the Fed is not looking at cutting rate hikes anytime soon. If the market is strong, unemployment is low, inflation is falling, then why would the Fed pause here? IF anything they can keep pounding QT and lower the balance sheet without much fear of the market stumbling. 

So, here we sit near the bear market line of rejection and the 200 Daily moving Average. Do we reject here, or breakthrough? There is an interesting battle happening here.

Economic Data this Week (all times are EST)? - 

  • A lot of Fed Speakers this week. Check the full calendar here: stonks.chat/feed/catalysts
  • Monday - Holiday
  • Tuesday - GS and MS earnings in premarket
  • Tuesday -NY Manufacturing Index at 8:30
  • Tuesday - Williams Speech at 3pm
  • Wednesday - UK/EU Inflation Reports at 2am
  • Wednesday - US PPI at 8:30am
  • Wednesday - Retail Sales at 8:30am
  • Thursday - LaGarde Speech at 5:30am
  • Thursday - Housing Data at 8:30am
  • Thursday - NFLX earnings afterhours
  • Friday - Nothing major

My Prediction - 

I am going to keep this short and simple. I believe we see a pullback to 393 at some point early this week, possibly 390. Bears will feel emboldened as that would be a rejection at the bear market trendline, and then we start to reverse course heading into the major tech earnings next week. I imagine a lot of Fed officials will maintain the hawkish rhetoric, but it will have little impact as the bulls know that 25 BPS hike for February is heavily favored to happen. 

Ultimately, I think the rally after the pullback could get as high as 430. There is a lot of bullish sentiment out there, and I don't see anything slowing that down.

Yet another week to keep it light and let the major reports dictate the trend.

Current Positions and Plays - 

  • I closed out my core puts early in the week for a nice gain. I did do a strangle on CPI and got walloped on it. I ended up scalping my way back green for the week. 
  • I am sticking with daily scalps for the time being. 

SPY Technicals - 

  • SPY Technicals - The 30 min, 1 hour and 4 hour are close to overbought.  Daily chart is neutral. 
  • SPY is under its 50 MA but it is over the 200 MA averages on the Daily chart. It just went above the 100MA.  
  • SPY Fibs for ATH to June 2022 low - 390 is the .236 line. There is a possibility for us to retest this line soon and it turns into support. 407 is the next Fib line higher. 
  • SPY Fibs for COVID low to ATH - 380 is the .382. If this level falls on the weekly close, it could lead to a major push downward. This seems to be the level that the market is comfortable buying at. 

Percentages from the Highs

  • SPY is approximately -20% (479 HIGH)
  • QQQ is approximately -35% (408 HIGH)
  • DJX is approximately -10% (369 HIGH)
  • IWM is approximately -30% (244 HIGH)

Levels I am Watching

  • $SPY - levels 380 (major) > 383 > 386 > 390 (major) > 393 > 395 > 400
  • NOTE: I have turned back into a daytrader. I love playing ES futures. 
  • This is not financial advice
0

Stock Market - Week Ahead: January 17, 2023

Economic Calendar
  • Monday: US Markets closed for MLK Jr Day.
  • Tuesday: NY Empire Index @ 830; FOMC Williams @ 3pm
  • Wednesday: UK CPI @ 2am; EU CPI @ 5am; US PPI + Retail @ 830; US Industrial Production @ 915; FOMC Harker @ 2pm.
  • Thursday:  US Housing Data @ 830; Philly Fed Data @ 830; FOMC Williams @ 6:30pm
  • Friday: FOMC Harker @ 900; Fed Waller @ 1pm

Earnings Calendar
  • Tuesday: GS + Banks premarket.
  • Wednesday: SCHW premarket.
  • Thursday: PG premarket, NFLX afterhours.

Market Thoughts:
  • Last week: The run into CPI was impressive and held.  Strong move from the bulls.  I was doing good up until my CPI strangle got absolutely roasted because we didn’t move at all (worst case scenario).  It was a losing week for me, but it’s on the back of a few week hot streak.
  • SPY right at the sloping line of resistance of 400.  It’s riding above its 200MA now.
  • QQQ getting close to its sloping line of resistance of 285.  It’s below its 200MA.
  • DIA/Dow is not far from an all-time high - mind blowing, really.
  • Both of these lines, everybody is watching because it’s where the rejections have been happening for a year now.  Will it hold true once more?
  • I think so - but there’s real risk to them breaking out above them and going nuts.  I’m trying to keep it light and wait for confirmation - in either direction.  Right now, it’s gambling at these levels to be on either side.
  • VIX is at almost 18.  Are we going to 15?
  • DXY is under 102 (we were at 115 top in September).  I think it’s going to find a lot of support at 100-101 that would be tough to push through.
  • HOWEVER….We’re going into earnings season.  We’ve got layoffs piling up in tech, banks preparing for loan delinquencies, some warnings being sounded, and once again the fate of the market is probably on Apple.
  • Unemployment + consumer spending remain the key numbers for me.  The upward move in consumer credit and downward move in savings should be a note of caution.
  • CPI is no longer important - it’s just going to keep going down for now, we know this.
  • Is the Fed going to cut?  I don’t see why on earth they would right now - or even this year.  People are saying they’ve gone too far.  How so?  CPI is coming down, the market is trying to push through 400 on 60 year low unemployment, consumer spending that won’t seem to back down, and earnings that seem OK so far.  Where’s the pain?  This is the sweetheart scenario for the Fed — plus it lets them keep hitting it with QT and ensure inflation doesn’t come back.  A pause - sure - that will happen in a few meetings, but not cuts.  Unless something major breaks.
  • After being in a chop box since mid-December, we finally ripped up starting Jan 6.  January is typically a strong month with new capital inflows, renewed optimism, all that.  We’re currently in a 20 point SPY rally, which was inevitable.
  • I remain bearish overall, though - we haven’t seen the bottom yet.  I think we’ll see SPX 3200-3300 this year as the bottom. However, I am just as fine trading these rallies, but keeping it light and rarely holding overnight.
  • The sentiment - right or wrong - is definitely to the upside for now.  Be careful standing in front of the train when bulls are in charge.
  • SPY range this week (guess): 390 - 402

Technicals (Latest):
  • SPY levels:  390, 396, 400, 405
  • 200 MA: 397.25

Trading Plan (This Week):
  • Current position: I’m holding /NQ (Nasdaq100) puts for March 2023 that I’ve gotten tangled up with and am now at a loss on.  I’ve got time on them, but I’m looking to exit at flat (almost had the opportunity on Friday before we reversed up) and reassess.
  • I’m going to ignore my /NQ position and just trade what’s in front of me.  Right now, that’s scalping /ES after the more important events this week, of which there are many


Screenshot 2023-01-15 at 23.09.40.png 132.15 KB

Screenshot 2023-01-15 at 23.09.20.png 131.38 KB
0

Stock Market Week Ahead: January 9, 2023 - SPY 380-400 range; JPow in the wild; CPI Thursday; confusing market - keep it light.

  • Monday: Nothing.
  • Tuesday: JPow speaks in the wild @ 0900 (!!)
  • Wednesday: Nothing.
  • Thursday:  FOMC Harker @ 0730; CPI @ 0830 (!!!)
  • Friday: FOMC Harker @ 0730 (again?); UMich Inflation Expectations @ 1000

Thoughts - General:
  • Last week: I was on another roll last week up until Friday.  I exited beautifully on Friday morning, then I made an error right before the ISM report I forgot about — I went short when I knew to go long after the NFP data (due to wage inflation slowing).  That blew a hole in my account that remains currently a large unrealized loss.  Being short doesn’t look good going into this week, either.
  • There’s a word that’s making its way around the media - goldilocks.  It showed up a lot this weekend.  I can’t ignore it, even though I still don’t think it’s going to happen.  Goldilocks is economic growth, unemployment staying low, and inflation coming down.  It seems unlikely to be pulled off to me, but they did get some data that supports it on Friday.
  • Right now the market is in between Fed Trade (betting on rate hikes / cuts) and Economy Trade (Recession or Not).  It’s hard to tell from day to day how the market is going to react to data.  A few months ago, it was crystal clear what was good news or bad news.  Now….it can go either way. 
  • With reductions in liquidity (QT) this means it will continue to be more explosive moves in either direction - like we saw on Friday.  That was a low volume move to the upside on slowing in wage inflation, yet still-strong labor market, and lowest unemployment in 50+ years.
  • I continue to maintain that Fed isn’t cutting until end of this year (Q4) at earliest OR when something major breaks.
  • Because of that, we SHOULD - eventually - have a spike in unemployment
  • Currently, the bond market is expecting some Fed cuts much earlier than that
  • Also on Friday we got a hint from Bostic that 25bps hike was more likely than 50bps.  That’s closer to a pause, for sure, so the market liked that.
  • on Tuesday, we have JPow in the wild - he can be a real roll of the dice in either direction - so expect that.  If I’m guessing, he’s going to acknowledge the NFP and warn more is needed and he still doesn’t like tight labor market.  So, nothing new.
  • on Thursday, we’ve got CPI.  Based on NFP Friday, this CPI will move the market.  Everybody is expecting a easing reading below 6% and I expect nothing less.  5.7% is the forecast, 6% was the previous reading.  Above or below the forecast and you know what happens.  In the real-time/on the ground, it feels really sticky, but not increasing.  This impacts corporate earnings, but not CPI reading.
  • Earnings kick off on Friday with the banks leading the show.  Here we go……I expect some wild moves this round from all sectors, especially tech.  Layoffs will be the flavor of the month with the impact to earnings being the tailwind.
  • Over in the UK, things continue to look much worse than the US.  Are they leading indicator or just their own scenario?
  • So where does that leave us?
  • I think we’ve got a bullish week on our hands.  JPow is a wild card, but everything else is screaming bullish (for this week): CPI, Fed speakers, NFP from Friday, all this goldilocks talk
  • If CPI comes in at expectations or below, I think it’s possible we see 400 this week. I think it’d sell off pretty quickly from there, though, as we then head into the earnings confessional.
  • My chart [will post below] says: stay out of the way until 398-400 and then short it.


Thoughts - Technicals (Latest):
  • SPY levels:  380, 385, 390, 396, 400
  • 200 MA: 398.62
  • Chart - Weekly: Neutral/Bearish - The lines are too tangled and RSI in dead middle, but this looks like a consolidation before a drop.
  • Chart - Daily: Bullish - looks quite bullish for this week.
  • Chart - 4h: Bullish - same.

Trading Plan (This Week):
  • Current position: I’m holding an /NQ (Nasdaq100) short position for March 2023 that is mostly a screwup from Friday.
  • I’m looking to exit this with as little loss as possible before CPI - hopefully at 385 SPY or lower.
  • I’ll stand out of the way until 398-400 SPY and then go short /NQ again
  • I may scalp calls along the way, but never holding overnight.

Screenshot 2023-01-08 at 23.29.35.png 228.81 KB

0

Weekly Market Preview - January 9th, 2023

Last Week Recap - 

SPY had a weekly range of 377 to 388. Friday alone moved from 379 to 388 on the back of the Jobs data and Services PMI data. It was a very intriguing week and it appears the bulls are starting to find a narrative that is sticking. We are back on the bandwagon that the Fed will pause on rates soon. The jobs data came in hotter than expected, and unemployment went down. However, the wage rate went down so that helps avoid a wage price spiral. 

The services PMI came in weak and the market took that as a signal that the Fed is doing its job in slowing the economy. It really seemed that the market was ready to go up and was just spinning any narrative they could to make it happen. The weakened economic numbers signals a possible soft landing if jobs stay strong, but it also gets us closer to a recession. Should be an interesting week ahead.  

Economic Data this Week (all times are EST)? - 


So this week has a few major landmines with JPow talking in premarket on Tuesday and CPI data coming in on Thursday. 

My Prediction - 

I do think we see some de-risking on Monday heading into that JPow speech on Tuesday. I am not sure what to expect with it, since this is a speech in Europe. He normally is not as hawkish in these speeches, so the market may not really have a negative reaction to it. 

The CPI data on Thursday is expected to show a cool report and that would give us three consecutive months of cooler inflation reports. The rate is still way above the 2% target the Fed wants, but the bulls will spin this as a downward trend that is showing that the Fed has done enough. 

I expect the market to pullback to 383-386 at some point and then move higher on that CPI report. A 400 test is possible with the right data. However, if that CPI report comes in hotter than expected, the market will head back below 380 in a hurry. 

Yet another week to keep it light and let the major reports dictate the trend.

Current Positions and Plays - 

  • I closed out my core puts for Feb 28 for a nice profit and grabbed some Mar 30th puts on Friday. I am slightly down on them due to Friday's continued move up after I grabbed them. 
  • I am looking at scalping most of the week. If an opportunity presents itself to close out the core puts for a gain, I will lock that in. 

SPY Technicals - 

  • SPY Technicals - The 30 min and 1 hour are overbought. 4 hour and Daily charts are all neutral. 
  • SPY is under its 50 and 200 MA averages on the Daily chart. It just went above the 100MA.  
  • SPY Fibs for ATH to June 2022 low - 390 is the .236 line. There is a possibility for us to retest this line soon and rejects. Then I am looking for a possible break to show support if the CPI data allows it. 
  • SPY Fibs for COVID low to ATH - 380 is the .382. If this level falls on the weekly close, it could lead to a major push downward. This seems to be the level that the market is hanging around. 

Percentages from the Highs

  • SPY is approximately -20% (479 HIGH)
  • QQQ is approximately -35% (408 HIGH)
  • DJX is approximately -10% (369 HIGH)
  • IWM is approximately -30% (244 HIGH)

Levels I am Watching

  • $SPY - levels 380 (major) > 383 > 386 > 390 (major) > 393 > 395 > 400
  • NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this. 
  • This is not financial advice
0

Stock Market Week Ahead: January 3, 2023 - SPY 380/390 range this week; economic data resumes; stay nimble, but bearish.

  • Monday: US Markets are closed.
  • Tuesday: US Manufacturing PMI @ 0945
  • Wednesday: US ISM PMI and JOLTS (!!) at 1000
  • Thursday:  ADP Payroll @ 0815, Jobless Claims @ 0830, Services PMI @ 0945
  • Friday: US Non-Farm Payrolls @ 0830 (this is event of the week), ISM Services PMI @ 1000

Thoughts - General:
  • Last week: My range prediction winning streak ended.  I was totally wrong on last week’s range - if you can believe it - I was too bullish!  I guessed 380-393, but it was 376 to 384.  No problem, I was holding puts.  I had a surprising lucky streak on timing and managed to close out near the bottom and re-buy at the highs on puts.  So I’m strutting into 2023 with half the position I had at nearly high of the week SPY avg.
  • As we kick off 2023, I repeat what I’ve said for the last few weeks:  There is no data-based bull case - we’re staring down a recession, bad earnings, rising unemployment, no QE (QT, actually).
  • The only hope bulls have is for something major/critical to break (which would cause a huge dip anyways) - that would cause JPow to cut rates.  Until that point, he’s not backing down/pivoting until end of 2023 at earliest.  He will hold the rate once he’s got it to at least 5.25% until then.  He’s going to beat inflation even if he goes too far (which I agree with). 
  • I read an article last week that said “Bull’s Biggest Fear in 2023:  That there is NOT a recession” - that’s a spot on headline.  It’ll be a long year of pain if they don’t get a full blown recession and make some dials spin.
  • It may just play out that way until the crash finally happens once something major can’t take any more slow, long-burning pain.
  • I may be looking a little too early in the year for SPY 330 though (April 2023 currently).  It may take longer to get and stay under that, just based off of how strong consumer spending is staying and how little unemployment is moving…..for now.
  • It doesn’t change my position, just timing. I don’t expect this to move straight down.  It will stumble down the stairs.  There will be plenty of bear market rallies (based on technicals) all the way to the bottom (wherever that is) and I’ll play as many as I can spot.
  • For me - those are the main things that matter - consumer spending & unemployment numbers.  Those will lead any earnings whiffs.
  • Does AAPL issue a warning about Q4?  The CFO did give a hint…  Does TSLA show weak delivery numbers?  It’s all going to happen in the next 2-3 weeks, if so. 
  • VIX is still asleep - but I’m looking for it to light up hard in January.
  • As for this week - I’ll be looking for some capital inflows/new year equity buying to push the markets up.  This is why I only have half my position.  I want the other half this week from as high as 390 if they’ll push it there.
  • We’ve got a normal schedule of data in the next two weeks - most importantly Payrolls (and wage growth) data on Friday - then CPI next week (it will still matter a little - just a lot less than it did).  JOLTS on Wednesday will make it move, too.  Keep an eye on the calendar above.


Thoughts - Technicals (Latest):
  • SPY levels:  370, 375, 380, 390
  • 200 MA: 399.92
  • Chart - Weekly: Neutral/Bearish - The lines are too tangled and RSI in dead middle, but this looks like a consolidation before a drop.
  • Chart - Daily: Bullish - support a move up for first 2 days of year.
  • Chart - 4h: Bullish - same.

Trading Plan (This Week):
  • Current position: I’m holding half position I want on /ES puts for March 2023.
  • If we get to 390 SPY, I’ll add more.
  • Then I’m just waiting for a shoe to drop.
  • I’ll play any key level bounces or obvious momentum with calls I exit by EOD.  Not holding calls overnight at any point.

SPY weekly in all its glory

Screenshot 2023-01-01 at 20.40.29.png 174.27 KB

1

Weekly Market Preview - January 3rd, 2023

Last Week Recap - 

It was a very entertaining week with the market testing under 380 a few times. Ultimately, we closed the year above 380 and that level has held up as support. It was a low volume holiday week so I am not sure we can put too much weight in any of the price action. There was not any additional economic data to change any of the bearish macro outlooks. 

The first week of the year brings back the data, fed speakers and the volume. The economic calendar is jammed packed this week with important data so lets take a deep dive into it. 

Economic Data this Week (all times are EST)? - 

  • Check the full calendar here: stonks.chat/feed/catalysts
  • Monday - Markets Closed
  • Tuesday - US PMI data at 9:45am
  • Wednesday - JOLTS data at 10am
  • Wednesday - FOMC Minutes at 2pm
  • Thursday - ADP Employment Report at 8:15am
  • Thursday - Services PMI at 9:45am
  • Friday - EU Inflation report at 5am
  • Friday - US Nonfarm Payroll data at 8:30am ⚠️ (main data for the week)

So this week is all about jobs jobs jobs. There are a few scenarios we need to keep an eye out for on how the market reacts to each of the jobs reports. Here are the scenarios I am looking out for on the big Friday's report:
  • Nonfarm Payrolls (Prev Month 263k) & Unemployment is 3.7%
    • If payrolls, employment number, or hourly wages comes in higher/hot vs the expectations, that would continue to show a tight labor market. The bearish argument here is that the Fed will want to keep this number down and thus will stay aggressive for longer.  The bullish argument here is that the labor market is still strong and could be due to a strong consumer, thus limits the recession argument and adds credence to the soft landing argument. 
    • If all the data comes in under expectations, that will bring the soft landing argument a lot of weight in the short term and it could spark a bear market rally. 

My Prediction - 

We won't have the full picture on the jobs data until that Friday report, so until then I am not putting much weight in the price action. Friday's premarket data does setup a great straddle opportunity and I will prepare to make that play. My gut says we are heading lower regardless of the data due to the inability of one set of reports to fully change the Fed's aggressive approach. Can we test 390 again? Sure, but I am not sure what allows that to stick without any sort of momentum in a believable bullish narrative. 

Current Positions and Plays - 

  • I am holding core ES puts for Feb 28. I have about 80% of my position and will probably sit back on adding anymore unless we test 390 again. 
  • I will be looking at entering a strangle on Friday in premarket for the Nonfarm Payrolls Jobs Data. 

SPY Technicals - 

  • SPY Technicals - The 30 min, 1 hour, 4 hour, and Daily charts are all neutral. 
  • SPY is now under its 50, 100 and 200 MA averages on the Daily chart. 
  • SPY Fibs for ATH to June 2022 low - 390 is the .236 line. There is a possibility for us to retest this line soon and most likely it turns into resistance. 
  • SPY Fibs for COVID low to ATH - 380 is the .382. If this level falls on the weekly close, it could lead to a major push downward. This seems to be the level that the market is hanging around. 

Percentages from the Highs

  • SPY is approximately -20%
  • QQQ is approximately -35%
  • DJI is approximately -10%
  • IWM is approximately -30%

Levels I am Watching

  • $SPY - levels 373 > 376 > 380 (major) > 383 > 386 > 390 (major) > 393
  • NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this. 
  • This is not financial advice
0

Weekly Market Preview - December 27th, 2022

Last Week Recap - 

We had quite a bit of fireworks last week with the market having a few breakdowns to the 376 test. The cracks in the bull thesis is starting to show and market participants are starting to lose faith. The top 3 things from last week that mattered to me were:
  • TSLA is in free fall. Margin calls starting to hit retail with nearly $5 billion in margin calls alone on Friday for Tesla. The daily chart for TSLA looks like a 5 min flush down. There is going to be a pop at some point for TSLA just based on the technicals. But until that pop happens, it is anybody's guess where the bottom is. 
  • David Tepper goes on CNBC and calls out people fighting the Fed. The billionaire hedge fund manager says he is going to take the central banks serious and is now leaning short in the market. If you have not seen this interview, please find it and watch the full version. 
  • PCE Core inflation comes in sticky. Headline goes down, but the core is showing signs of slow decline and stickying at the current levels. This is another headwind for the Fed to keep an aggressive approach. 

There will be a lot of chatter about a Santa Rally this week. Historically, the last 5 days of the trading year finish on an uptrend. Will it happen this year?

My Prediction - 

With the low volume week ahead on a shortened holiday week, it is really tough to play either side with much confidence. I have a rather large core put position for the end of February, so I am going to ignore it this week. It will be all about small scalps and not get married to any trend that shows up this week. I know a lot of folks will tout the Santa Rally, but I am not going to put much faith in that. So it is all scalps for me with an expectation of a max +/- 2% move on the week. 

Current Positions and Plays - 

  • I am holding core ES puts for Feb 28. I will look to add to these at SPY key levels on a retests of major levels. 

Economic Data this Week (all times are EST)? - 


THE PLAYS OF THE WEEK for SPY:

  • If you are not comfortable scalping, I would sit this week out. I am going to be in and out of plays very fast and will look to add to my core puts if we test 390 on the SPY. 

SPY Technicals - 

  • SPY Technicals - The 30 min, 1 hour, 4 hour, and Daily charts are all neutral. 
  • SPY is now under its 50, 100 and 200 MA averages on the Daily chart. 
  • SPY Fibs for ATH to June 2022 low - 390 is the .236 line. There is a possibility for us to retest this line soon and most likely it turns into resistance. 
  • SPY Fibs for COVID low to ATH - 380 is the .382. If this level falls on the weekly close, it could lead to a major push downward. 

Levels I am Watching

  • $SPY - levels 373 > 376 > 380 (major) > 383 > 386 > 390 (major) > 393
  • NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this. 
  • This is not financial advice
0

Stock Market Week Ahead: December 27, 2022 - SPY 380/393 range this week; Baby Santa Rally; no bull case in January.

  • Monday: US Markets were closed.
  • Tuesday: US Housing data @ 1000, Dallas MFG Index @ 1030
  • Wednesday: US Housing Data @ 1000
  • Thursday:  US Jobless claims at 0830 (Event of the week)
  • Friday: Chicago PMI @ 0945

Thoughts - General:
  • Last week: Look at that range from last Sunday for the week  [ https://stonks.chat/symbol/SPY/posts/317 ] - 376/390 - off just barely - range was 375/387.50 🏆 Two weeks in a row!  I ended the week a bit lower on my account, due to an unrealized ass kicking on some ES puts that I bought at ~380 - should have stuck to my rules and waited for 385 that was inevitable (we’re there tonight)
  • As I said last week, from my view, there is no data-based bull case - we’re staring down a recession, bad earnings, rising unemployment, no QE (QT, actually).
  • The only hope bulls have is for something major/critical to break (which would cause a huge dip anyways) - that would cause JPow to cut rates.  Until that point, he’s not backing down/pivoting until end of 2023 at earliest.  He will hold the rate once he’s got it to at least 5.25% until then.  He’s going to beat inflation even if he goes too far (which I agree with). 
  • Now we turn to the Recession Trade.  What matters? Unemployment rate, consumer spending, and corporate earnings.  These are the new CPI/FOMC.  The bulls are thinking a goldilocks scenario (unemployment remains low, consumer stays strong, yet inflation comes all the way down) is possible - and it is - but just seems very unlikely to me.
  • VIX is still asleep - but I’m looking for it to light up hard in January.  I think institutional money is just trying to keep it calm, sweep problems under the rug until 2022 year end prints.  Then they’ll pile into puts and run the VIX up.  I see January as being down 10-15%
  • I also want to be clear:  I don’t expect this to move straight down.  It will stumble down the stairs.  There will be plenty of bear market rallies (based on technicals) all the way to the bottom (wherever that is)
  • I’ve still got SPY 330 circled for April 2023.
  • As for this week - I see a slow tick upwards until Thursday.  Baby Santa Rally, if you will.  This is historically a low volume and green week.  There’s nothing on the calendar that will spook the market.  Only unexpected international would jolt it.  I think we’ll cross SPY 390 and maybe even touch 393.  China re-opening will help and is probably the biggest news this week.
  • Friday - good luck - that’s EOY, EOM, EOQ - the final 30 minutes will be fun to watch with some popcorn.
  • US Markets will be closed on Monday, January 1 in observation of New Years.


Thoughts - Technicals (Latest):
  • SPY levels:  375, 380, 390, 393, 400
  • 200 MA: 400.67
  • Chart - Weekly: Neutral - Nothing clear here.  Lines are tangled and RSI is in the middle.
  • Chart - Daily: Bullish - this looks to confirm my above note about slow uptick this week into Thursday.
  • Chart - 4h: Bullish - same.

Trading Plan (This Week):
  • Current position: I’m holding a bigger bucket than I currently want of /ES 3700P March 2023
  • If we get to 390 SPY, I’ll add more.
  • I’ll probably pick up some /ES long to hold for the week before the open.
  • I’m not going to trade much this week, particularly as my bear claws are out, but the volume & news isn’t there this week to agree with me.

0

Weekly Market Preview - December 18th, 2022

What a week we had last week with the CPI and FOMC coming in. This week does not have anything major on the economic calendar until Friday's PCE data. 

Let's recap the events of last week real fast, as that will help us make my case for the upcoming few weeks. 

CPI and FOMC Recap - 

CPI came in cooler than expected and the market rocketed up to over 410 in premarket. It could not hold the gains and plummeted and hung around 405 until FOMC. That was a critical data point to me that the cooler CPI no longer meant that the market was going to rocket up higher.

Right before FOMC, SPY was at 405. The Economic Projections came out with the Fed Funds Rate for 2023 set to come in at 5.1%. But the major things that stuck out to me in that report was the lower GDP expectations and the higher Core Inflation expectations. Basically, the Fed is expecting a recession with those projections.

Screen Shot 2022-12-18 at 9.59.40 PM.png 209.17 KB


In the press conference, JPow came in very hawkish. He was extremely hesitant in his answers to not say anything bullish for the market to rally. He was very clear that he was not pausing, not cutting, keeping his inflation mandate at 2% and all the projections factored in the latest CPI report. It was a very bearish conference.

The market seemed to be dazed during the conference and closed near 399. But the selling intensified the next 2 days and SPY closed the week a little over 383. The weekly chart is pretty ugly for SPY.

Screen Shot 2022-12-18 at 10.14.07 PM.png 546.09 KB


My Prediction - 

We are shifting from the inflation trade to the recession trade. So what we have used as signals and macro indicators has now shifted. I find Fed Daly's comments on Friday very telling. She is one of the most dovish Fed members and came out with a hawkish statement. She stated that she is looking at holding the peak fed rate for 11 months (!) and that the peak fed rate could adjust meeting by meeting. JPow must have said we need to have a unified message to the FOMC members in the meeting last week.

Those comments to me signal the end of the Fed trade. So any upward movement we had from the June lows and the Fed pivot theory, should be lost. It won't go in a straight line, but I am fading every pop we get. We should start to see the TLT jump up as folks run to Bonds as a safehaven. 

Current Positions and Plays - 

  • I am holding core SPX puts for Jan 20. I will look to add to these at SPY key levels on a retests of major levels. 

Economic Data this Week (all times are EST)? - 

  • Check the full calendar here: stonks.chat/feed/catalysts
  • This week is pretty light until Thursday.
  • Thursday - US GDP data in premarket
  • Friday - PCE inflation and consumer data in premarket 
  • Friday - UoM inflation and Consumer Data at 10:00am. The sneaky big report that no one mentions. 

THE PLAYS OF THE WEEK for SPY:

  • It is pretty simple for me moving forward. Grab puts at key levels of 386, 390, 393. If we never test them, look at grabbing some calls near 373 as a hedge. 

SPY Technicals - 

  • SPY Technicals - The 30 min, 1 hour, and 4 hour charts are all almost oversold. The Daily chart is neutral. 
  • SPY is now under its 50, 100 and 200 MA averages on the Daily chart. 
  • SPY Fibs for ATH to June 2022 low - 390 is the .236 line. There is a possibility for us to retest this line soon and most likely it turns into resistance. 
  • SPY Fibs for COVID low to ATH - 380 is the .382. If this level falls, it could lead to a major push downward. 

Levels I am Watching

  • $SPY - levels 373 > 376 > 380 (major) > 383 > 386 > 390 (major) > 393
  • NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this. 
  • This is not financial advice
0

Stock Market Week Ahead: December 19, 2022 - SPY 376/390 range this week; FOMC digestion + PCE Data on Friday; I’m very bearish.

  • Monday: Nothing.
  • Tuesday: US Housing data @ 0830
  • Wednesday: US Consumer Confidence at Housing data at 1000
  • Thursday: US GDP and Jobless claims at 0830
  • Friday: US PCE at 0830 and UMich at 1000

Thoughts - General:
  • Last week: I ended the week solidly higher.  I didn’t hit what I was expecting for such an explosive week, but still nothing to complain about.  Learn, optimize.
  • Look at that range from last Sunday for the week https://stonks.chat/symbol/SPY/posts/315 — basically nailed top and bottom! “Stock Market Week Ahead: December 12, 2022 - SPY 380/410 range this week” 🏆
  • What I said last Sunday is what happened at FOMC, but he was even more hawkish: “I could be wrong, but I think the bulls are nearing maxed out on the Fed Trade + Peak Inflation narrative.  There will be little to get excited about after Dec 14.  It’s going to be 50bps (best case), he’s going to lay out a path of higher rates and longer - just slower to get there.  He’s going to warn there’s much work to do, still.”
  • My biggest mistake last week:  Not holding until Friday the bucket of puts I bought on FOMC Day after JPow confirmed hawkish stance.  I sold them on Thursday early around 391.50 SPY, but that was only the beginning as we found out with SPY closing at 383 on Friday.  I didn’t want to stand in the way of OpEx just in case it did something mechanical and silly, but that fear ended up being hokum and very costly from a trade I’d been planning for a long time.
  • We also saw - right in front our eyes on CPI day - the shift from Inflation/Fed Trade to Recession Trade I’ve been looking for.
  • I no longer consider CPI worth playing and am down-ranking it in importance going forward.  The only reason I’d put it back in the mix is if we saw 2 prints HIGHER than previous months.  Until then….thanks for the good times we shared.
  • After this week, there is no data-based bull case - we’re staring down a recession, bad earnings, rising unemployment, no QE (QT, actually).
  • The only hope bulls have is for something major/critical to break (which would cause a huge dip anyways) - that would cause JPow to cut rates.  Until that point, he’s not backing down/pivoting until end of 2023 at earliest.  He will hold the rate once he’s got it to at least 5.25% until then.  He’s going to beat inflation even if he goes too far (which I agree with).  People forget how much shit they gave the man early on when ending QE and not raising rates.
  • Now we turn to the Recession Trade.  What matters? Unemployment rate, consumer spending, and corporate earnings.  These are the new CPI/FOMC.
  • In the Recession Trade, DXY going up is positive for SPY; down is negative for SPY.  This is a flip of just a couple weeks ago.
  • TLT is where the focus needs to be right now (replaces TNX on my watchlist).  As TLT goes up, SPY should come down.  This indicates a move out of the stock market into Bonds.
  • VIX is still puzzling everybody - but I’m looking for it to spin up hard in January.  I think institutional money is just trying to keep it calm, sweep problems under the rug until 2022 year end prints.  Then they’ll pile into puts and run the VIX up.  I see January as being down 10-15%
  • I also want to be clear:  I don’t expect this to move straight down.  It will stumble down the stairs.  There will be plenty of bear market rallies (based on technicals) all the way to the bottom (wherever that is)
  • I’ve still got SPY 330 circled for April 2023.  I’ll post the updated chart below.
  • There’s actually some decent data for the week - Housing Data should continue to show decline; US GDP on Thursday; Friday is most important with PCE and UMich consumer sentiment.  If you want to go risk-off, Friday is the day to avoid until all the data is out.  I might do that.
  • US Markets will be closed on Monday, December 26 for Christmas.


Thoughts - Technicals (Latest):
  • SPY levels:  370, 380, 390, 393, 400
  • 200 MA: 401.50
  • Chart - Weekly: Bearish - Ripster clouds are just crossing down.  Buckle up.  We’ve got a long ways to go down.
  • Chart - Daily: Bearish - Same as Weekly.
  • Chart - 4h: Bearish - but likely to get oversold soon.

Trading Plan (This Week):
  • Current position: Nothing.  I closed out in the last hour of Futures on Friday.
  • I’m buying Feb 2023 /ES Puts this week.  I’ll pick some up Sunday night at 385 (SPY).
  • Then I’ll be looking to add more at 390, 393, 396.  I can’t see 400 getting tested, but I’ll buy there as well.
  • I don’t see any other trade. If there’s a Santa Clause rally, I will only use it as puts buy opportunity.

Screenshot 2022-12-18 at 20.57.49.png 138.78 KB
0

FOMC Preview - December 14th, 2022

CPI Recap - 

What a wild day. CPI came in cooler than expected and that is saying something cause the expectations were already cool and the market ripped up on the data. We actually hit 414 in premarket and then opened near 410. That 410 level proved to be too big to handle yet again, and the market began to selloff. We actually hit sub 400 and everyone was looking around like what the hell just happened? We got a cooler CPI and the market treated it completely different than the cool reading from last month. That is a pretty clear signal that the inflation trade is coming to an end and the recession fears are starting to enter the market. Keep an eye on bad news finally turning into bad news again in the market. 

FOMC Preview - 

FOMC is where the fun really begins. JPow is the one man that can shift any trend and create major moves in the markets. One very very important note about this FOMC meeting is that we get the economic projections for the Fed Funds rate. This was not in the last meeting so this was last updated in September. The fed funds rate was projected to be 4.4 in 2022 and 4.6 for 2023. JPow let us know that the Economic Projections would be higher if they were released in the last meeting, so we can safely assume that near 5.25% is on the table for 2023.

The next section is purely my opinion and prediction for FOMC and how it will play out So please take everything I say with a grain of salt. 

I anticipate that the market will initially move down on the release of the data at 2pm. Then I think JPow will talk the markets up using bullish buzzwords, and be the same kind and gentle JPow that we last saw a few weeks ago. The market will then blast higher while he is speaking, as they believe JPow is satisfied with his efforts and the pain is over from the Fed. 
HOWEVER... the market will start to move down as it digests the data from the economic projections and realize that the Fed is actually going to keep raising rates and have no intentions to pause until more data allows them to. This will lead to a massive selloff and I believe will officially be the end of the inflation trade and the start of the recessionary trade. This will trap and hurt a lot of folks, so be nimble. 

How I am playing FOMC. I will be doing a small strangle before the 2pm release and will close out the put side at the data release. I will then hold the call side as I anticipate the kind and gentle JPow. I will then close the call side out once the market shows a reversal back down. Until then, I will ride it up and start grabbing core puts for Feb or March at key levels. But I need to see a reversal first and those economic projections must have 5.25% on them.

There is nothing JPow can say tomorrow that will give me confidence to enter any calls for the long term. There is a shift happening in the markets and I need to start adjusting my strategies from the inflation trade to the recessionary one. I think the "big drop" that everyone is waiting on, won't happen until the unemployment number starts spiking. 

This is not financial advice. 

0

Stock Market Week Ahead: December 12, 2022 - SPY 380/410 range this week; CPI + FOMC are all that matter. Listen to bond market for long-term.

  • Monday: Consumer Inflation Expectations @ 10am?
  • Tuesday: US CPI @ 0830 ⚠️
  • Wednesday: FOMC statement @ 2pm; JPow takes the mic at 2:30pm.  Don’t forget this is SEP release as well ⚠️⚠️
  • Thursday: ECB & BOE rate update/hikes @ 0700 & 0815. US Retail Sales & NY Manufacturing at 0830
  • Friday: EUR CPI at 0500 and US S&P PMI @ 0945

Thoughts - General:
  • Last week: I kept it light, traded very little, and ended the week up nicely.  I was totally wrong about the first half of the week (from my Week Ahead last Sunday).  That was apparently immediately on Monday, so I adjusted my sails.
  • Repeating what I said last Sunday: I could be wrong, but I think the bulls are nearing maxed out on the Fed Trade + Peak Inflation narrative.  There will be little to get excited about after Dec 14.  It’s going to be 50bps (best case), he’s going to lay out a path of higher rates and longer - just slower to get there.  He’s going to warn there’s much work to do, still.
  • CPI will keep coming down no matter what - maybe not in real terms but definitely in relative to YoY (very important to understand this point!).  The real number could be 10% inflation but the YoY vs 2021/2022 will keep dropping (just math..).  Unless we get a return of inflation run in 2023 later in the year - very possible.  Hello 1970’s!
  • After the Fed Trade is done with, I don’t see the bull case - we’re staring down a recession, bad earnings, rising unemployment, no QE (QT, actually).  I’m calling this the Recession Trade.
  • I expect Monday to be muted.  Tuesday will pop off due to CPI but even that will be tame because Dad speaks to us on Wednesday afternoon.
  • He will thread the needle like the magician that he is.
  • Then the market will pick a direction around 2:45/3pm.
  • It will set the trend for the rest of the year.  Either we’re drilling another 10-20% from here; or we’re going to Santa Rally until EOY - then get the cliff dive in Q1.  I’m ready for either - and again - JPow will set the trend on Wednesday - plenty of time to trade it, don’t get in a rush while he’s talking.
  • Recession is coming, it’s just coming slower than we thought - unemployment hasn’t shown up in the reports yet, earnings from AAPL were still strong, and consumer spending still shockingly strong.
  • DXY being down is becoming a bad thing for the market
  • Swap out TNX and put TLT on your watchlist
  • VIX is getting sparky (finally)


Thoughts - Technicals (Latest):
  • SPY levels:  396, 400, 405 (200MA), 410, 416
  • Chart - Weekly: Bearish - oh boy.  I’ll post this chart below.  We’ve seen this move 3 other times recently.  Get ready.
  • Chart - Daily: Neutral - bearish lean, but you can’t make a move until JPow drops the SEP + speaks.
  • Chart - 4h: Neutral - same, pointless until Wednesday afternoon.

Trading Plan (This Week):
  • Current position: Nothing.
  • I’ll open an SPX strangle on Monday afternoon for Wednesday expiration - for CPI.
  • I’ll close the winning side, let the loser rip (why not).  I’ll then open a new strangle on Wednesday around 1pm for Friday expiration.
  • I’ll close the winning side on Wednesday afternoon at some point, and let the loser ride.
  • Those are the short-term trades.
  • Bond market + weekly chart tells me what’s really coming - but pointless to make that move before Wednesday’s close.  I’ll be looking to add Jan/Feb puts.


Screenshot 2022-12-11 at 21.37.53.png 188.69 KB
0

Weekly Preview for Dec 11, 2022 - CPI, FOMC

What a week we have ahead of us. This is the week where accounts can blow up in either direction if you are not careful. Blind chart analysis can shift in an instant with the fundamental events we have, so make sure you are 100% confident in the trend if you are going to ride out a play for more than a few minutes. 

Economic Data this Week (all times are EST)? - 

  • Check the full calendar here: stonks.chat/feed/catalysts
  • This week is LOADED
  • Monday - UK GDP (DXY ramifications) in premarket
  • Tuesday - CPI at 8:30am (major data release)
  • Wednesday - FOMC Economic Projections at 2pm
  • Wednesday - FOMC Press Conference with Papa Powell at 2:30pm 
  • Thursday - BoE (UK) and EU Interest Rate decisions - DXY implications at 7:00am
  • Thursday - US Retail Sales at 8:30am
  • Friday - PMI at 8:30am


THE PLAYS OF THE WEEK for SPY:

Let's recap what we know in the market so far:
  • JPow was dovish in tone and has all but guaranteed 50 BPS hike in December. 
  • Jobs Data came in way too hot. Wages went up as did the Job numbers. 
  • CPI and PPI showing inflation is cooling a little
  • Oil is falling
  • TLT (bonds) is rising
  • DXY is above 105 which has been prior support
  • VIX is hanging out near 20
  • FOMC and CPI are scheduled for next week. 
  • PPI data came in above expectations but lower than the previous month.

Here is the truth, no one knows what direction we are headed. There is conflicting data all over the place and the best we can do is have a strong hypothesis of what we can expect in the short term and long term. So, when we are previewing this data, just know that I will be hedged for either direction. 

CPI Preview - 

Twitter user @TradrNate did an amazing job breaking down the previous CPI reports and there impacts in the market. I highly recommend taking a look at the tweet at the end of the post. 
twitter.com/TradrNate/status/1...

CPI is rumored to come in lower than the previous months cooler reading, and thus continue the momentum going for the peak inflation narrative. The Core inflation rate is major reading that matters and it is set to come in at 6.1% compared to last months 6.3% reading. So lets layout the scenarios for this data:
  • Core CPI comes in below 6.2% - This will be a bullish move in the markets. The data now backs up that JPow's aggressive moves are working (albeit slowly) towards lowering inflation. 
  • Core CPI comes in at 6.2% or 6.3% - This will be an initial bearish move and then a bullish recovery imo. Look for a similar move from Friday's PPI. 
  • Core CPI comes in above 6.3% - This will lead to a selloff in the markets. That would mean the bullish CPI report from last month can be treated as a one off. 
I will be playing a strangle on this data release. 

FOMC Preview - 

FOMC is where the fun really begins. JPow is the one man that can shift any trend and create major moves in the markets. One very very important note about this FOMC meeting is that we get the economic projections for the Fed Funds rate. This was not in the last meeting so this was last updated in September. The fed funds rate was projected to be 4.4 in 2022 and 4.6 for 2023. JPow let us know that the Economic Projections would be higher if they were released in the last meeting, so we can safely assume that near 5% is on the table for 2023.

The next section is purely my opinion and prediction for FOMC and how it will play out So please take everything I say with a grain of salt. 

I anticipate that the market will initially move down on the release of the data at 2pm. Then I think JPow will talk the markets up using bullish buzzwords, and be the same kind and gentle JPow that we last saw a few weeks ago. The market will then blast higher while he is speaking, as they believe JPow is satisfied with his efforts and the pain is over from the Fed. 
HOWEVER... the market will start to move down as it digests the data from the economic projections and realize that the Fed is actually going to keep raising rates and have no intentions to pause until more data allows them to. This will lead to a massive selloff and I believe will officially be the end of the inflation trade and the start of the recessionary trade. This will trap and hurt a lot of folks, so be nimble. 

How I am playing FOMC. I will be doing a strangle before the 2pm release and will close out the put side at the data release. I will then hold the call side as I anticipate the kind and gentle JPow. I will then close the call side out once the market shows a reversal back down. Until then, I will ride it up and start grabbing core puts for Feb or March at key levels. But I need to see a reversal first and those economic projections must have 5% on them. If they do not, then my theory is dead and we are headed for a major Santa Rally. 

SPY Technicals - 

  • SPY Technicals - The 30 min is close to oversold. 1 hour, 4 hour and daily chart are neutral.
  • SPY is broke under its daily 200MA at 404.79. This MA was the top of the last bear market rally. 
  • SPY Fibs for ATH to June 2022 low - 390 is the .236 line. 
  • SPY Fibs for COVID low to ATH - 380 is the .382. 418 is the .236.
  • Bottom line is Bulls need to break 400 and bulls need to break below 390. 


Levels I am Watching - 

  • $SPY - levels 380 > 386 > 390 > 393 > 396 > 400 > 403 > 410
  • NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this. 
  • This is not financial advice
0

Wednesday, December 7th, 2022 Market Preview

The price action has been very volatile the last few sessions. JPow talked last Wednesday and the SPY was at 395 before he started talking. We rocketed up to 410 the next day after the speech. Lingered around 407 on Friday near the close. 

We had a light economic data this week, so the conditions favored the bulls. Well that faded fast as the market started selling off fast on Monday. We broke under 400 on Monday and haven't really looked back since. On Tuesday, we retested 400 and then proceeded to break 396, 395, 393, and bounced off of the 100MA at 392. Back to back days with some solid selling pressure. So the question that everyone is asking... Why? 

Here is my brain dump on what is going on in the markets:
  • JPow was dovish in tone and has all but guaranteed 50 BPS hike in December. 
  • Jobs Data came in way too hot. Wages went up as did the Job numbers. 
  • CPI and PPI showing inflation is cooling a little
  • Oil is falling
  • TLT (bonds) is rising
  • DXY is above 105 which has been prior support
  • VIX is hanging out near 20
  • FOMC and CPI are scheduled for next week. 

So with all that known in the markets, why the price action lately? Well, I have a theory that we have moved on from the Fed Trade (inflation, rate hikes being the focus) to the Recession trade. I expected this shift to happen after FOMC this month to give us one last Fed Trade reaction with the 50 BPS hike causing a spike, but it appears that info and reaction already happened last week with JPow's speech. 

I will be monitoring the TLT moving forward. If it keeps rising and stocks and commodities stay flat or drop, then we know that there is a flight safety happening and we can assume that it is due to recessionary fears. We are getting near the end of the Fed Trade, and now it is whether it has already started or is this just a simple pullback. Time will tell. 

Current Positions and Plays - 

  • I have scalped a lot lately with some good success. I did re-enter some Jan puts for SPX 3800. I am most likely going to exit these before FOMC next week. 

Economic Data this Week (all times are EST)? - 


THE PLAYS OF THE WEEK for SPY:

  • Honestly it is just play the trend and stay super light. The 15 min chart with the 8 and 21 EMAs has been incredibly accurate this week. 

SPY Technicals - 

  • SPY Technicals - The 30 min, 1 hour, and 4 hour are just above oversold. The daily chart is neutral.
  • SPY is broke under its daily 200MA at 404.79. This MA was the top of the last bear market rally. 
  • SPY Fibs for ATH to June 2022 low - 390 is the .236 line. I expect us to retest this line soon and most likely it turns into support. 
  • SPY Fibs for COVID low to ATH - 380 is the .382. 418 is the .236.

Levels I am Watching

  • $SPY - levels 386 > 390 > 393 > 396 > 400
  • NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this. 
  • This is not financial advice
0

Stock Market Week Ahead: December 5, 2022 - SPY 396/412 range this week; no Fed Speakers; Friday is most important. DXY, VIX drifting lower ⚠️

  • Monday: Nothing.
  • Tuesday: Nothing.
  • Wednesday: Nothing.
  • Thursday: Jobless claims @ 0830
  • Friday: PPI @ 0830am & UMich Consumer Data @ 10am (this looks like economic data of the week..)
  • NEXT WEEK: FOMC - Dec 14 @ 2pm - and it has SEP (Summary of Economic Projections).  Last FOMC until Feb 1 2023.

Thoughts - General:
  • Last week: Almost nailed the top with the 410 high range for last week.  JPow came in way more dovish than I expected and he sent the market flying.  I ditched my Feb 2023 puts for a loss and went long on calls - that was a prudent move.  I ended up nicely for the week instead of getting drilled.
  • This week…..
  • No Fed Speakers until Dec 14/FOMC.  Enjoy the peace!
  • DXY and VIX drifting down still - VIX in particular is right at the spot it does two things - goes sideways for months OR spikes up violently.
  • On Friday, the jobs report was very hot (unexpected) and it caused a sell off at the open that was entirely shrugged off by end of day — possibly due to JPow optimism from Wednesday OR what Alf spotted (not as hot as it seemed) - https://themacrocompass.substack.com/p/job-market-less-hot-than-you-think 
  •  
  • Is 75bps back on the table for Dec 14 due to that hot jobs report (last one before FOMC)?  It’s possible - JPow did leave that open - but I think it’s unlikely.  I think the data is all just lagging and there’s already more damage than the current data is showing.  While that would be good for the Fed Trade, we’re about to transition away from that and look at the Recession Trade.
  • China relaxing its strict COVID rules in some cities.  Good for oil.
  • Some technical observations 
    • DIA/Dow is only 2400 points from its ATH (that’s not much for the Dow to move based on its move-sizes in the last 60 days).  It has completely broken above its 2022 downward trend line.
  •  
    • IWM has broken above its 2022 trend line and 200MA
  •  
    • QQQ is right near its 2022 trend line (though still a bit away from the 200 MA)
  •  
    • SPY pushed above its 200 MA and alllmost got above the 2022 trend line
  •  
  • This has been one hell of an impressive rally from 350 SPY.  That still-unexplained event from two CPIs ago, the recent CPI +20 day, and then JPow sending it another +12 on Wednesday added up quickly.
  • I could be wrong, but I think the bulls are nearing maxed out on the Fed Trade + Peak Inflation narrative.  There will be little to get excited about after Dec 14.  It’s going to be 50bps (best case), he’s going to lay out a path of higher rates and longer - just slower to get there.  He’s going to warn there’s much work to do.
  • CPI will keep coming down no matter what - maybe not in real terms but definitely in relative to YoY (very important to understand this point!).  The real number could be 10% inflation but the YoY vs 2021/2022 will keep dropping (just math..).  Unless we get a return of inflation run in 2023 later in the year - very possible.  Hello 1970’s!
  • After the Fed Trade is done with, I don’t see the bull case - we’re staring down a recession, bad earnings, rising unemployment, no QE (QT, actually). 
  • The consumer spending is still scary as hell - this has got to slow down - or we’re going off a cliff.  Unemployment should sort that out at some point.
  • Overall, I see us marching up - slowly - into Dec 14.  After that? Maybe drift sideways with one final EOY/Santa Clause rally just to get those bonuses - then January/Feb I’m expecting a big dip when reality hits of what the market is going to face for the following 12 months and those unemployment numbers start spiking.


Thoughts - Technicals (Latest):
  • SPY levels:  396, 400, 405 (200MA), 410, 416
  • Chart - Weekly: Bullish - for now.  CPI + JPow really broke the trend on this one, impressive.  I’ll post this one below.
  • Chart - Daily: Neutral - though small bullish lean.  We’re right at the 200MA.  DIA + IWM made it above it, SPY likely too as well before Dec 14
  • Chart - 4h: Bullish - marching on upwards.

Trading Plan (This Week):
  • Current position: Nothing.
  • There’s nothing on the calendar this week.  It should be a low/normal volume, slow grind upwards until Thursday and especially Friday.
  • Friday should be event of the week with PPI & UMich data out.
  • I’ll pick up some calls on Monday and trade the strength.
  • I’ll also be doing some March 2023 puts shopping (QQQ and SPX) since VIX is 19 - at some point between now and Dec 14.

SPY Weekly

Screenshot 2022-12-04 at 22.09.14.png 169.51 KB



0

Moving to $SPY discussion board

I'm going to move my future market updates over to $SPY discussion board.  I almost exclusively talk about SPX/SPY so it makes more sense, plus we're going to do some snazzy stuff with the view/data there.

https://stonks.chat/symbol/SPY


0
Mentions: SPY

Thursday, October 6th Market Preview

What Happened? - 

  • SPY range on Wednesday: 371 to 379.
  • I had pegged Wednesday as a non-event day with little economic data that would impact the markets too much. I was wrong...
  • ADP reports came in hot, with wage rates coming in very hot. OPEC+ agreed to cut production by 2 million barrels a day. And ISM Non-Production came in above expectations. This led to the market to pullback under the 373 support. All was looking good for bears until a big options trade came through for SPX 4500 for Jan 2023. 
  • That trade seemed to spark a rally and pushed SPY all the way back to green for the day. It was another gut wrenching punch for the bears.


What Am I Looking Out For This Week?

  • Fed Pivot Theory is back and better than ever. I hate every part of this, but the markets are rallying on this optimism so we need to take it serious. The next landmine to stop the optimism is the Jobs data on Friday. 
  • Jobs data this week (Tuesday, Wednesday and Friday) will add gas to the fire for the market as all signs are pointing to a hot jobs number with consumer sentiment still strong. Bears need Jobs to stay hot so the Fed can stay comfortable being aggressive. Bulls need a slowing jobs number to put doubts in the Fed's aggressive approach. 
  • The DXY and TNX is on watch. If these two breakdown then the markets will keep rallying. 

Current Positions and Plays:

  • CORE Position: SPX 3600p for 11/18 - I added to this position when SPY was at 378 and will keep building this position if we keep climbing. 
  • Strangle Play - I will do a strangle for SPX at 3pm today in anticipation of Friday's big jobs release in premarket. I will grab both sides slightly out of the money for Friday's expiration date. 
  • Scalps - I am getting back into scalp trading as well when the setups merit it. This means waiting until 10:30am and let my intraday Fibs have some data to work with. 

Economic Data this Week (all times are EST)?


SPY Technicals - 

  • SPY Technicals - The 30 min and 1 hour is almost overbought. The 4 hour and Daily are neutral.  
  • SPY Fibs for ATH to June 2022 low - 362 is the .000 line. Bulls got this level back today and it was a very big win for them. 
  • SPY Fibs for COVID low to ATH - 380 is the .382. 349 is the .500.
  • SPY - The 200 Weekly SMA is 358. The bulls need to keep this level.

THE PLAYS OF THE DAY for THURSDAY for SPY:

  • We don't much on the calendar today so we could see a choppy day. I am looking for derisking to happen in the second half of the day. 
  • I will be waiting until 10:30am and see if I can set up some intraday Fibs and try and identify any scalps 
  • At 3pm I will enter a strangle for Friday's job data. Depending on the derisking at the end of the day, I may get an opportunity to close this out profitably before the bell and then re-enter at the close. 
  • NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this. 
  • This is not financial advice

Levels I am Watching

  • $SPY - levels 360 > 362 > 367 > 370 > 373 > 376 > 380 > 383 > 386
1

Economic Events Calendar

Link Copied to Clipboard!