It was a big day for economic data. UK inflation data came in higher than expected. EU GDP came in slightly lower and US Retail Sales came in slightly higher. The market opened red and chopped around a bit until the FOMC Minutes release.
The minutes release saw its normal spiked action and it appeared as if the market was headed back to 430 shortly after the release. But as the algos digested the info, the seller s showed up and pushed us down from 429 to 427. More importantly, QQQ was unable to hold the 330 level.
What to Expect on Thursday?
Weekly Jobless Claims at 8:30am - Not a big event
Philly Fed Manufacturing Index at 8:30am
Existing Home Sales at 10am - this one could set the tone for the day.
Current Positions and Plays:
I have some SPX puts for Sept, and QQQ puts for December. I am as bearish as you can get. These turned green today and I am looking at riding them to SPY 420.
What Do I Think?
SPY Technicals - We worked out some technicals today. The 4 hour and daily are nearly overbought. While the 30 min and 1 hour are neutral.
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.
200 SMA is at 431.57. This is a big level to jump over.
SPY seems to be gravitating to the 427
QQQ Technicals - We worked out some technicals today. The 4 hour and daily are nearly overbought. While the 30 min and 1 hour are neutral.
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.
Keep an eye on the 330 level
THE PLAYS OF THE DAY for THURSDAY for SPY:
Scenario 1: We gap down under 423. I would look for SPY to retest 425 and then head lower. We are getting to the end of a rally so I expect a stop loss raid to happen at certain levels if the buyers cannot successfully get back over the key levels. A flush could happen at any moment when the volume shows back up. We got some gaps to fill on the down side.
Scenario 2: We gap up above 429. I would sit back and see if SPY can break 431. If it can, that would be a bullish indicator that the rally is not over just yet. We need a catalyst to get us over the this major level.
Scenario 3: We open flat. Just sit back and set your intraday Fibs and scalp away. This is a scalpers market for the next few sessions.
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.