We got the jobs data on Friday and boy was it hot hot hot. It came in almost double over estimates and it will put to rest a Fed Pivot theory for now.
My puts ended up nicely at the open, and I held a little too long but still managed a green day. Still trying to figure out the timing of these swing trades a little better.
The market recovered back to 413 at the close. So if the jobs report was hot, why did we recover from under 410? More on that below.
What to Expect on Monday?
No major economic Data
Earnings Premarket - PLTR and TSN in premarket. Watching Tyson for some clues on the food side of inflation. My guess Tyson crushes earnings
Earnings Afterhours - UPST, MARA, NVAX. This is a nice throwback to 2020/2021 retail darlings. Watching for entertainment and nothing more.
Wednesday has the CPI data release in premarket. Nothing really matters until then.
Current Positions and Plays:
I am in SPX 4100 puts for 08/17 and ARKK 45 puts for October.
What Do I Think?
SPY Technicals - We are just outside of overbought on the 4 hour and now neutral on the 30 min and 1 hour. The Daily is also getting overextended.
SPY Technicals - The chart to watch here is the 4 hour imo. This is now starting to show red impressions on the MACD and looks to be finally getting a pullback to clear up the overbought technicals.
SPY Technicals - All eyes on the 413 and 410.50 levels. Break under 410.50, it is a quick stop at 408 and then 400. Hold above 413, and we are testing 416. Break 416 and its off to 420.
WTF is Going On?
Jobs Data came out hot, but we still recovered 413. Explain this please?
The market reacted negatively to the jobs report in premarket. The resiliency of the market recovering 413 on Friday cannot be ignored, but it also wasn't the green light to go long. Jobs data is important, and it was by far the biggest economic event of the week, but it is not on equal footing as a CPI or FOMC data release. The jobs data is like an extra topping on the pizza, it is important but not overall relevant in the grand scheme of things.
So CPI is on Wednesday, what is your take?
This is feeling like a big ol' bear trap. I expect the topline number to be less than the previous months by quite a bit due to the drop in oil prices. So it is all about the Core number. If that number is not hot (higher), the market will start its peak inflation narrative. That will rally the markets. If the Core number comes in higher, the market will dip to key supports on the indices (SPY 400? possible 396) then bounce from there imo. So either way I am looking for a bounce.
THE PLAYS OF THE DAY for MONDAY for SPY:
Scenario 1: We get above 415. I will grab some more puts and hold them into Tuesday. We are going to de-risk heading into CPI.
Scenario 2: We get down below 410. I may take some profit here. But I am trying my best to hold these puts until Tuesday at the close.
Scenario 3: We open flat (+/- 1 points). Just sit back and ignore the market. No point in playing anything.
NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this.
NOTE #2: I will be out of everything no matter what on Tuesday at the close. I am not messing with CPI data release.
Levels I am Watching
$SPY - levels 396 > 401 > 404.40 > 408 > 410 > 416 > 420 > I refuse to go higher on the levels.