samosa 22:25 PM - Jul 25 2022

Tuesday, July 26th Market Preview

What Happened?

  • Choppy day with SPY staying in a range from 394 to 396 all day. This was expected with all the fireworks scheduled for later this week. 
  • Then in afterhours, Wal-Mart drops the bomb on the market and announces a cut to its Q2 forecast just 20 days before its earnings report... Why? I will try and answer this below. 

What to Expect?

  • Tuesday
    • Premarket Earnings - UPS, Coke, GM, GE, McDonalds
    • Consumer Confidence Index at 10am EST. 
    • Afterhours Earnings - Google, Microsoft, Enphase, Visa, and Chipotle
  • Wednesday
    • Premarket Earnings - Shopify, Boeing, Spotify
    • FOMC Meeting Summary + Rate Hike Decision at 2pm EST. 
    • FOMC Press Conference with Jerome Powell at 2:30pm EST.
    • Afterhours Earnings - Meta, Ford, Qualcomm, Teledoc, Etsy
  • Thursday
    • Premarket Earnings - Pfizer, Tilray, MasterCard
    • GDP Data Release at 8:30am EST
    • Afterhours Earnings - Apple, Amazon, Intel, Roku
  • Friday
    • Premarket Earnings - Exxon, Chevron, P&G
    • PCE Inflation Data at 8:30am EST
    • Consumer Spending Data at 8:30am EST
    • Q2 Employment Cost Index at 8:30am EST

Current Positions and Plays:

  • I scalped some puts for a small gain just to feel something. I honestly should have just held off but I am an addict. 
  • Holding all cash.

What Do I Think?

  • SPY Technicals - We are neutral on the 30 min, and the 1 hour charts. The 4 hour chart is slightly above neutral.
  • SPY Technicals - We are now comfortably above the big level at 380 for SPY. Next major level I have is 396.33. 

WTF is Going On (Version 2)?

  • Wal-Mart did what today?
    • WMT came out and announced a drop in it is Q2 guidance for profits. This sent the stock and other retail giants (TGT, AMZN, COST) tumbling in afterhours. 
  • Why did they randomly announce this now?
    • This is the million dollar question. The easy answer is they wanted to get a head of it and limit the damage from the earnings call on 08/16. That seems ok, but it sent the stock down 9% today, so that didn't seem to work. I have a bat shit crazy theory on this and that in a weird way, this is yet another corporate entity signaling to the Fed to not be so aggressive with the tightening. We know that back in 2018 and even way back in the Volcker era, that Wall St throws tantrums over tighter monetary policy. Is this another version of that? Will this give the Fed pause to not be so aggressive on Wednesday and thus avoiding the hammer that it needs to drop to kill inflation. Again this is just my theory, but I am finding the timing of this to be a little suspect.
  • So with the WMT news, its puts all week now right?
    • No. Think of this week as a boxing match. Today was Round 1, and yes it swayed to the bears at the closing of the round. But it was not a knockout punch. We have a lot of data to get through and a lot conflicting data could start to arise. In the morning UPS, Coke, GE could all report ok earnings. Then you are looking at the CCI at 10am and it comes in at expectations. That gives the Bulls the win in Round 2. Assume nothing this week until Friday. 


  • Scenario 1: We gap down below 393. Sit back and see if it can reclaim it, if it can't play puts to 390. This is probably the most likely scenario given the WMT news. 
  • Scenario 2: We gap up and break over 397. I will be looking at puts on any trend reversal candle. 
  • Scenario 3: We open flat (+/- 2 points). I will most likely wait until 10am and see how that data impacts the market and see if a trend can be identified.
  • This is not Financial Advice

Levels I am Watching

  • $SPY - levels 383 > 385 > 390 > 393 > 396 > 401 > Valhalla
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Maverick - 1 year ago
I really like how your previews are taking shape/organized lately.

WMT theory - it's not a bad theory, really.  I hadn't considered that.  The timing on for you theory though (20 days early?) 🤔

I agree that it's a boxing match.  My scenarios are very tight because of this.  It'll get more volatile for the week after Tuesday AH.  Watch that VIX....

Your note about 397 and puts is opposite of my 397 and calls.  I think if we gap 397 you're going to get tech boys piling in for a strong close.

Bones Tradez

Created By: Bones
Created: Mar 2, 2022
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Twitter: @BonesTradez
Options Trader - Not Financial Advise
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