On Friday, the market moved to an incredible 427 with a slow uptick. Note it was the lowest volume day of the year.
What to Expect on Monday?
No major economic data on Monday.
WMT has earnings on Tuesday in premarket so keep that in mind if you plan on swinging anything.
NOTE: Wednesday is the big economic data data day with Retail Sales and FOMC Minutes.
We have to keep an eye on 2 things, DXY and Oil. If the DXY goes up, that normally means commodities go down. If commodities go down, that helps keep inflation under control. If the DXY starts to drop, Oil will go higher and that will push us to a higher inflation reading in the future. But... DXY going up also does not help equities, so the DXY is going to be the key for me going forward.
I have some SPX puts for August, Sept, and QQQ puts for December. I am as bearish as you can get.
What Do I Think?
SPY Technicals - We are overbought on the 30 min, 1 hour, 4 hour and on the Daily.
SPY Fibs for ATH to 2022 low - 421 is the .50 and 435 is the .618.
SPY Fibs for COVID low to ATH - 418 is the .236.
QQQ Technicals - We are overbought on all the major charts, 30 min, 1 hour, 4 hour and on the Daily.
QQQ Fibs for ATH to 2022 low - 339 is the .50 and 322.54 is the .382.
QQQ Fibs for COVID low to ATH - 315.59 is the .618. Looking at this as support.
THE PLAYS OF THE DAY for MONDAY for SPY:
Scenario 1: We gap down to 424. I would expect a jump up from here and it will ultimately pullback down. So I will look to get out of my August puts near the open and wait for the rejection after the pump to re-enter some more puts for September.
Scenario 2: We open flat. Just sit back and wait for SPY to test 430. No reason to be in a hurry to enter any puts today. I can't do calls.
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.