Maverick 23:07 PM - Aug 07 2022

Week Ahead: August 8, 2022 - SPY 400/420; CPI on Wednesday; PPI Thursday; mixed technicals.

Howdy, friends. šŸ‘‹Iā€™m back.  I was away for a week or so.  I didnā€™t make any trades during this time and didnā€™t follow the market.  So, Iā€™m coming in fresh.

  • Monday: Nothing.
  • Tuesday:  Nothing.
  • Wednesday: China CPI, Germany CPI, US CPI - all premarket. Fed Speakers @ 11am and 2pm
  • Thursday: PPI in premarket
  • Friday: UK GDP, France CPI in premarket; UMICH Sentiment @ 10am

Thoughts - General:
  • SPY 413 - wow.  Last trade I made, it was 391.  Looks like Hot Girl Summer Rally started while I was offline.
  • Looking at just the charts, I think thereā€™s two scenarios that could play out in the coming days/weeks 
    • October 26, 2021 - went from 455 to 470 by November 8, 2021 before cooling off
    • OR June 7, 2022 - consolidation before jumping off a cliff
  • Weā€™re likely to consolidate to the slight downside until Wednesday - when CPI + Global CPI numbers come in - which will either send HGSR on its way higher OR stop it in its tracks - for now.
  • The rally weā€™ve seen seems a bit silly - maybe it's not - but the SPY/market in general just wants to go up - for any reason it can find.  Itā€™s default is always to the upside.  THereā€™s also piles of cash on the sidelines that has been waiting for a reason to jump in -- and earnings season wasnā€™t a let down.
  • JPow doing another 0.75 (second in a row) makes it seem like weā€™re on the right track to taming inflation.
  • Weā€™re likely to see some inflation numbers cooling in this Wednesday CPI report, especially the headline (impacted heavily by falling gas prices), but Core CPI may be a bit tougher to shake ā€” but they will look for ANY positive in the numbers to push it up
  • Government is warming up its cash firehose again - climate, health, chips, etc. bills in excess of $500B.  Theyā€™re going to make it rain.
  • All this sure seems like the final leg before a recession/bust comes in.  The warning signs are popping up everywhere in the ECONOMY, not necessary the stock market; despite the job report on Friday.
  • We also had a better than I expected earnings season - but donā€™t ignore those warnings we got. On the flip side, we got some very bullish guidance from the majors (MSFT, AAPL, etc)
  • Itā€™s tough.  Thereā€™s opinions on both sides that make sense.  Technicals are mixed at best.
  • Regardless of next couple weeks, I think we pull back very hard in 4Q when real economic situation rears its head
  • I need to read more this week, for sure.  Look for further updates during week.

Thoughts - Technical:
  • SPY levels:  390 (major), 396, 405, 416, 420
  • Chart - Weekly: Bullish - it broke through the lines/clouds it needed to.  Bravo, very impressive.  I didnā€™t think it was going to happen, but it was warning it was possible for a couple weeks.  This one says hold my beer, weā€™re going higher.
  • Chart - Daily: Bearish - getting ready to pullback.  
  • Chart - 4h: Bearish - overbought.  This is the main one Iā€™m focused on.
  • Chart - 1h: Neutral - consolidation.

Trading Plan (Monday):
  • Scenario 1: If we gap to 416, taking puts down to 412/410.
  • Scenario 2: If we open below 413, puts to 410.  Close out.  If 410 breaks to 409, look to re-enter and possibly hold overnight to 405.
  • I can only justify puts right now.  Calls are off the table  with these RSI/MACD conditions.
  • I think Scenario 1 most likely.  Scenario 2 looks like a big stretch and unlikely.
  • I am going to let one SPX trade out for the entire scenario that happens and not lock in profit early.  Only at the price triggers I set.  Iā€™ve been seeing too many of these scenarios play out by end of day and I was selling too early and not letting it play out.

SPY, 4h

Screen Shot 2022-08-07 at 23.06.14.png 347.38 KB
1
Login to join the discussion!

Comments

Maverick - 1 year ago
šŸ† "Scenario 1: If we gap to 416, taking puts down to 412/410."

Look at today's chart and behold! šŸ˜

P&L: +$1,600

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!