What Happened Today (Tuesday)
- SPY traded 385/393
- Neither of my scenarios were right, so I just sat on the sidelines in awe. I also was just tired as hell today, so I wasn’t too upset. That was before the damn thing closed +10 points. Then I just had real FOMO and sadness.
- To scratch my itch, I picked up NFLX (equity) at 200. I filled at 220 right after the close on the ER. That put a little pep in my step for sure!
- NFLX had set such low expectations, anything better than bankruptcy was likely to pop the stock. That played out.
- The news out of EU caused rate hikes there and then the DXY to dip. This only poured fuel on the bull rally.
- Continued rotation out of oil/commodities - and ignoring the AAPL - speed bump and you’ve got what we saw on the QQQ/SPY today. Unfortunately, I didn’t glue all this together until this evening, hence the no trades.
- SPY is almost 395 and QQQ over 300 right now in after hours
Looking Ahead (Wednesday)
- Reports: UK CPI @ 2am EST; US Oil inventories at 10:30am EST
- Earnings: Tesla AH + many more
- This market is raging right now. +10 on Tuesday and futures are already up another +3.
- Is this a Hot Girl Summer rally already? I was expecting one a bit later, but maybe these “not so awful” earnings are the spark it needed — though next week is ‘the’ week still.
- After we get UK’s CPI data out of the way on Wednesday morning, it’s a bit easier to get a clear view. Also next week is FOMC, but I think we all know what that’s going to be at this point.
- SPY levels (updated): 380 (major) > 385 > 390 (major) > 393 > 398 > 400 (psych) > 410 (major)
- Chart - Weekly: Neutral/Bullish - it’s actually breaking up, though still weeks before a cross up. I remain skeptical.
- Chart - Daily: Bullish. Found direction. Lots of room on RSI/MACD to keep going.
- Chart - 4h: Neutral - had the big move today, approaching overbought.
- Chart - 1h: Bearish - it has a little more run in it, then it’s going to be overobught.
- Chart - 30m: Already overbought.
- Without a fresh fundamental event, I think we’re coming down before Friday close, well under 395.
SPY Trading Plans (Wednesday)
- Scenario 1: If we at/below 395, calls to 398/400 (max). Then it’s time to find a puts entry.
- Scenario 2: If we open below 390, careful of a bear trap. I am not sure I’d bother with it. If anything, look for strength again and entry for calls to 395.
- Just a reminder that it’s earnings season, so don’t get too stuck on any direction…..
30min chart for tomorrow - overbought.