On Monday, we opened slightly red and again the market bought the dip on low volume. SPY moved to an incredible 429 before facing some resistance there.
What to Expect on Tuesday?
Housing economic data at 8:30am.
WMT has earnings in premarket.
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. These are red at the moment, but the only one worrying me is the
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 TUESDAY for SPY:
Scenario 1: We gap down to 425 due to WMT's earnings. I would look to hold my puts and maybe trim near the 423 mark if it drops. If we recover, I will hold my puts heading into Wednesday's big economic data.
Scenario 2: We open flat. Just sit back and wait for SPY to test 430 and see how it reacts to it.
Scenario 3: We gap up due to WMT's strong earnings. This will be a tough pill to swallow, but it would also put us in an extreme overbought scenario. I would look to cut my short term August puts if SPY broke 433.
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.