Maverick 01:26 AM - Jul 13 2022

Market Day Ahead - July 13, 2022 - SPY - 373/390; CPI day; lots of thoughts; brace for big volatility.

What Happened Today (Tuesday)
  • SPY traded 386/379
  • Scenario 1 - and only one I wanted to play - played out damn near perfectly: “Scenario 1: It opens wherever, no other major news, chop until 2pm.  At 2pm, as long as we’re around 385 or below 380 already, I’ll play puts and close by end of day - no way am I holding overnight into CPI on Wednesday.”
  • At 2pm, it was just under 385.  Started falling and drilled all the way to 379 (more than I expected) by the close, then bounced two points to close at 381.
  • Only problem was I had other obligations at this time, so I wasn’t able to play it.  It was satisfying, either way. 
  • Oil took a walloping today -8% or so on “recession fears” — but Samosa there’s more to the story than that and we’ll learn more after CPI data drops.
  • That was about it.  Calm before the storm tomorrow.

Looking Ahead (Wednesday)
  • Reports: CPI @ 0830 - this is, without question, event of the month so far.  Get ready.
  • Earnings: Delta (premarket)
  • What else is there to do except speculate on the CPI?
  • I think we’ll get hottest CPI headline/overall number yet - if not 9% then very close.
  • CPI Core - and there is where the focus needs to be because it’s what the Fed uses - may show some cooling.  This value excludes food and energy (which is silly as hell).
  • We could have an immediate push down on a hot headline number, but then a bounce on a cooling Core.
  • If both come in hot, then see you at 373 (or lower).
  • If core comes in cool, I think we’ll see 375 in premarket and then a bounce back over 383 (at least, 390 comes in view)
  • There’s some merit to Samosa’s argument that if Core is cooling, then they’ll push hard on the Headline saying we’re topped out “but look at oil! it’s down huge from June highs” - to try to make this entire thing bullish.
  • If they are successful or the data gives any reason to believe inflation top is in (I don’t think it is), there’s also tons of cash sitting on the sidelines right now in fear of recession+inflation raging.  They just need a decent reason to jump back in - it will be a tidal wave when it happens.
  • …. but then we have earnings season coming in starting this week.  So much to consider.  Buckle up for volatility.
  • DXY, VIX, TNX will all be on the move as well, so options are going to be very expensive at the open.  Resist temptation, IMO.  Bull or bear trap will be set.
  • SPY levels:  373 (major) > 375 > 380 (major) > 385 > 390 (major) > 393
  • Chart - Weekly: Bearish (Long-term)
  • Chart - Daily: Bearish, but a confusing cloud crossing.  On watch
  • Chart - 4h: Bearish
  • Chart - 1h: Neutral - nearing oversold.
  • Chart - 30m: Neutral - touched oversold today.

SPY Trading Plans (Wednesday)
  • Consider Samosa’s scenarios for Wednesday - he’s deep in this matrix on this event - https://stonks.chat/group/9/posts/532
  • Scenario 1: Headline CPI hot + cooling Core - letting it open and get a few candles out of the way, then looking to buy end of July CALLS for a 5 point SPY flip by EOD.
  • Scenario 2: Headline CPI hot + hot Core - buying PUTS and will close them by EOD.
  • Scenario 3: Headline CPI cooling + cooling core - buying CALLS at the open and looking for 5 point SPY jump by EOD (it’ll already be up a hell of a lot by the open)
  • Scenario 1 is what I think is most likely.  It’ll also include a big bear trap.
  • Let’s make some money and have some fun.

Screen Shot 2022-07-13 at 01.24.46.png 219.15 KB
0
Login to join the discussion!

Comments

Maverick - 1 year ago
July 13 - Recap: None of my scenarios played out exactly, but I couldn't resist the oversold 30m/1h.  Played calls after open, puts at close.

P&L: +$1340

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!