Maverick 23:02 PM - Jul 10 2022

Week Ahead: July 11, 2022 - SPY 380/393 this week; CPI; ramp up week for earnings/data in July.

  • Monday: Nothing.
  • Tuesday:  Nothing.
  • Wednesday: CPI @ 0830am EST; data release of the week.
  • Thursday: PPI at 0830am; China GDP @ 10pm
  • Friday: UoMich Sentiment @ 10am

On Watch
  • International: Unrest in Sri Lanka, China ( ZHENGZHOU ), and of course Russia/Ukraine
  • International: Inflation reports on Wednesday from several countries
  • Earnings season kicking off with Pepsi on Tuesday PM, Delta Wednesday PM, TSM (Semis) on Thursday PM
  • REMINDER: FOMC is July 27

Thoughts:
  • There’s quite a lot going on for rest of July.  This week feels like a ramp up week of data/reports/moves.
  • CPI is on Wednesday - I, like most others, expect it to continue to tick up (8.8% YoY and 1.1% MoM are expectations - though it’s much higher).  This will cement whatever the Fed is leaning towards.
  • At this stage, I expect 0.75% for July 27.  I don’t see how they can do any less.  There’s even a chance for 100bps, though unlikely.
  • Earnings kick off - as I said, ramp up week, but it’s some old line S&P500 companies, so they’re going to set the pace for the others.  I think we’re going to see lots of revised guidance and lower ends mentioned.
  • With inflation so hot (still), upcoming rate hikes (0.75% almost guaranteed), and just international chaos going on — why aren’t we at SPY 350?  Well…
  • Despite the bad news, there is some good news: oil prices are dropping, jobs are still hot hot, unemployment low, some sectors are the economy are at pre-COVID levels, the Fed is restoring some credibility - finally - by raising rates at a sensible speed, and the US Dollar is strong as hell.
  • It’s not all about the Fed, even though much of the focus is rightly there.
  • That said, I think this week or two of optimism we had is just a step on the way down and the bear market will continue as earnings come out.
  • SPY levels:  375 > 380 > 385 > 390 > 393 > 398
  • Chart - Weekly: Bearish (though it’s trying to turn up - don’t see it happening long-term)
  • Chart - Daily: Bullish.  RSI turning up, clouds crossed (as expected in last week’s Week Ahead)
  • Chart - 4h: Neutral.  This one could go either way from here.
  • Chart - 1h: Bearish.  RSI and MACD both say it’s coming down to 375?
  • Chart - 30m: Bearish.  Same, downward trend started after slapping overbought on RSI.

Trading Plan (Monday):
  • Scenario 1:  If we open at 385 or below, look for a 380 test on Monday.  I wouldn’t expect that to break.  There’s still plenty of bullish sentiment and room on the chart right now.
  • Scenario 2: If we open at 387 or higher, you already know - we’re testing 390.  After that, I’ve got lines at 393 and 398.
  • I think Scenario 1 is most likely.  Based on futures, we’re looking red, but I don’t expect it to be brutal (though my overnight puts would be happy).  There’s no known news coming out on Monday or Tuesday.  Heading into Wednesday, however, there’s much to consider.  We’ll evaluate it then.

Screen Shot 2022-07-10 at 23.01.20.png 267.62 KB
2
Login to join the discussion!

Comments

Maverick - 1 year ago
Monday - neither scenario played out.  It opened right in between at 386!  Then just traded sideways pretty much all day.  Tight range.

Maverick's Moves

Created By: Maverick
Created: Feb 8, 2021
Total Followers: 13
Follow
I trade SPY, QQQ, and specific story sectors using technical analysis and gut rubs.

I'll post my thoughts and market moves here.

Twitter: twitter.com/stonks_maverick
Substack: mavericksmoves.substack.com
Link Copied to Clipboard!