Market Day Ahead - July 21, 2022 - SPY - 390/400 range; ECB rate hike + DXY will move the dial.
What Happened Today (Wednesday)
- SPY traded 391 - 396
- 🏆Scenario 1 was the winner, or close enough: “If we [open] at/below 395, calls to 398/400 (max). Then it’s time to find a puts entry.”
- Sadly, I didn’t play it, didn’t believe it was correct. Had two bad entries in puts and only made it out with a profit because GOOG gave me a gift around noon (pausing some hiring). Had I listened to Scenario 1, I would have been up 3x what I was. Grrr…
- VIX was down, but DXY started climbing up off that 106.40 bottom today. It closed around 107.. This is the one to watch for right now (esp tomorrow)
- The market otherwise grinded sideways all day in a tight range (options crusher)
- TSLA reported afterhours. Beat on profit, light on revenue. Stock was up +10 in the end. I’d say it’s just showing some cracks….which they all are.
Looking Ahead (Thursday)
- Reports: ECB (European Central Bank) meeting (for rate hike); Lagarde speaks @ 0845. Normal Thursday US data at 0830.
- Earnings: Numerous industrials/Dow in premarket
- I expect the ECB to announce a 0.50% rate hike. This will move the DXY down (106 again?) and equities up, if so.
- Let’s look at the charts for tomorrow
- SPY levels: 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, but Hot Girl Summer is looking likely.
- Chart - Daily: Bullish. Found direction. Lots of room on RSI/MACD to keep going.
- Chart - 4h: Neutral - getting toppy.
- Chart - 1h: Bearish - just got out of overbought today.
- Chart - 30m: Same
- “Without a fresh fundamental event, I think we’re coming down before Friday close, well under 395.” (Yesterday) OK, we got that with the 391 print today, that got us out of overbought territory. I think there’s more to go in the before Friday looking at 30m/1h charts.
- I think the primary mover on Thursday will be ECB hike + DXY. DXY down, equities up. The majority of the move will likely be done in futures/premarket, so be careful about jumping on a rally late.
- The best thing that could happen (for bulls) is a pullback soon - Friday/Monday. If we're going into Big Big Tech Earnings in overbought conditions, that's not going to pan out well. Coming from a place of consolidation/neutral technicals will get it much higher and hold.
SPY Trading Plans (Thursday)
- Scenario 1: If we open at/above 395, calls to 398/400 (max). Too risky beyond that.
- Scenario 2: If we open below 390, I’d need to see what caused it, first - then as long as it’s purely technical, I’d be looking at calls.
- Scenario 3: We open around 400 (possible if DXY drops big), then give it 30 min to top out and look for entry on puts because it’s going to pay its 30m/1h taxes at some point. I’d be looking for 3-5 points.
- Just a reminder that it’s earnings season, so don’t get too stuck in a direction and keep in mind this bull is still in rage mode.
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Maverick's Moves
Created By: | Maverick |
Created: | Feb 8, 2021 |
Total Followers: | 13 |
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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
I'll post my thoughts and market moves here.
Twitter: twitter.com/stonks_maverick
Substack: mavericksmoves.substack.com