QQQ - Invesco QQQ Trust Series 1 20:54 PM - Feb 12 2023
by: Maverick

Stock Market Week Ahead: Feb 13, 2023 - QQQ 292-305 range; CPI + Retail Sales + Fed Speakers.

Stock Market Week Ahead: Feb 13, 2023 - QQQ 292-305 range; CPI + Retail Sales + Fed Speakers.

Economic Calendar
  • Monday: NY Fed 1 & 5 year inflation @ 1100
  • Tuesday:  CPI @ 0830 ⚠️, FOMC Williams @ 1400
  • Wednesday:  Retail Sales @ 0830 ⚠️
  • Thursday:  Jobless claims + Housing + Philly Fed @ 0830., FOMC Mester @ 0845, FOMC Bullard @ 1330
  • Friday: Nothing.
  • Note: There are more Fed speakers on the calendar, so please check that.  I just noted ones I am interested in.

Market Thoughts:
  • Last week:  I ended the week slightly up, but basically flat.  Had a big mistake post-JPow, but recovered it by end of week.
  • Economic calendar:  Unless you’re living under a rock, you know it’s CPI week.  This one could be spicy.  I’ll explain.
  • Earnings: This is done as far as I’m concerned, so I’ll drop this point.
  • The bond market made an critical change in positioning this week - they’re now believing the Fed that we’re going higher, possibly to 6%.  Mike @ Mott covered this very well - https://youtu.be/SGHtp3t_5o4?t=434
  • The yield curve is 100% inverted.  The 2/10 continues to push higher.  QQQ was rising with it (shouldn’t be) and finally got the message late last week.
  • The bulls sound like they’re getting a little sweaty up here — for the short-term.
  • Repeat from last week:  I think we could see an uptick in CPI (as early as the March 14 report) and JPow to come in with a 50bps with new SEP.  FOMC next meeting + SEP will be March 22.  If not then, then it’ll be during the summer/June meeting.  Inflation is pushing higher at some point.
  • Repeating from last week:  I expect pretty much any dip to get bought until either CPI reverses course OR unemployment ticks up a few notches.  No hope for the bears until then, because even earnings aren’t missing quite enough yet.
  • Well….updated CPI consensus numbers came in last week and they ticked higher.
  • Then on Friday, BLS released revised CPI numbers for previous three months.  All numbers ticked up, including reversing December’s infamous -0.1% to +0.1% - https://seekingalpha.com/article/4577589-january-cpi-report-shock-market
  • MoM and especially Core MoM is what Bulls are betting on most.  As I’ve been pounding the table on, inflation isn’t dead - not even close - it just slowed the pace down for now.  Easing financial conditions (clearly visible on NFCI) + 25bps + Jolly JPow are only adding fuel to that fire.  Mark it - they will have to come back and hit it harder at some point - before they even pause - not after.
  • Now let’s talk charts….
  • SPY held a key number - 405
  • QQQ basically held a key number - 300
  • Opening under 299 should be a quick move down to 296
  • Opening above 300 would be impressive, but I think it gets sold off by EOD (derisking this spicy CPI)

Technicals (Latest):
  • QQQ 200 MA: 291 (well above it)
  • SPY 200 MA: 394 (still well above it)

Trading Plan (This Week):
  • Current position: I entered an NQ short on Friday at the close and added more to it on Sunday night for an average of 12,320 NQ
  • I’m looking for 12250 at least, but 12200 before CPI
  • I will NOT hold through CPI.  I intend to be neutral on Monday afternoon or early Tuesday at the latest
  • After CPI, I’ll decide what to do - I want to review the data (not the initial market reaction)
  • If warm/higher than expected, I’d expect QQQ 292.  I do not expect a ‘hot’ reading.

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