We opened again flat, and it was mostly a choppy day. There was again a pop near the open to 415, but the sellers came in batted it back down to 413. We just hung around that level until the end of the day.
NVDA reported their earnings and their forecast came in weak. This led to a slide in afterhours.
All this flat action is setting up for a major move on Friday. One more day to get through.
Thursday - TSLA's 3 to 1 stock split goes into effect
Friday - PCE Inflation Data at 8:30am
Friday - Jerome Powell Speaks at 10am
It is all about Friday. Those two items have an opportunity to spark a rally.
Current Positions and Plays:
I again had an opportunity to get out of my calls with minimal damage and again held through the pop and drop. I am looking for a bounce over 416 to exit before Friday.
I am looking at doing a straddle or strangle play for Friday expiration on SPY. I will enter this at 3:15pm EST. My plan is to grab a call and put that is about $2 or $3 out of the money for Friday's expiration. One will die, and one should payout. Looking for the winner to be above 200%.
What Do I Think?
SPY Technicals - We are out of oversold on the 30 min chart, 1 hour chart and are now neutral. We are barely out of oversold on the 4 hour chart. The daily 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 and has now proven to be the possible top resistance of this bear market rally.
QQQ Technicals - We are out of oversold on the 30 min chart, 1 hour chart and are now neutral. We are barely out of oversold on the 4 hour chart. The daily 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. This did not hold up at all today. I expect we revisit this level on Tuesday.
THE PLAYS OF THE DAY for THURSDAY for SPY:
I am sorry for the repetitive nature of these previews, but we have just been in the same zone all week.
Scenario 1: We gap down under 410. We should see 410 being defended a bit so I expect a bounce here. I will just hold my calls and wait for the bounce.
Scenario 2: We gap up above 416. I would look for a rejection point near 418, sell my calls here and play my strangle play for Friday.
Scenario 3: We open flat. Just sit back and see if the QQQ can hold 315.50. If it does, then we have a potential bounce back to 416.
My confidence level on the 3 scenarios above is low, so the best approach is not trade until Friday. There is no real A+ setup presenting itself for a swing entry right now.
NOTE: Friday morning is presenting a good momentum opportunity with the PCE and JPow events.
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.