Stock Market Week Ahead: Feb 27, 2023 - QQQ 293-308 range; JPow + JOLTS + NFP
Economic Calendar
- Monday: Factory Orders @ 1000
- Tuesday: JPow - Senate @ 1000; Consumer Credit @ 1500
- Wednesday: ADP @ 0815 (does this matter anymore?), JPow - House @ 1000, JOLTS @ 1000
- Thursday: Jobless Claims @ 0830, Fed Waller @ 1000
- Friday: Non-Farm Payrolls + Wages @ 0830 (event of the week)
- NEXT Week: CPI + PPI + Retail Sales + UMICH
- NEXT NEXT Week: FOMC
Market Thoughts:
- Last week: I was at a year high going into Thursday morning - then went short on the morning’s data (bearish) when we broke through 200MA support. I was dancing. Then Bostic spoke + we bounced. Hard. That ripped my head off, I had no stop in. Then I averaged down on Thursday night, piling in more to the short. You can look at the Thu/Fri chart to see how this turned out. Ouch. I’ve got a new stop policy that will prevent such a screwup in the future.
- Economic calendar: We’re getting this party started this week with JPow, JOLTS, NFP; then next week CPI + PPI. Then FOMC after that.
- Repeating from last week: My overall sentiment has not changed - I’m bearish and remain so. It’s going to take months to play out, however, with the unemployment rate and insane consumer spending. I still think we’re just going to run off a cliff and ‘break’ something. That’s not today or even this month.
- The bearish case remains squarely in deteriorating fundamentals in the face of rising rates.
- The bullish case is technical and narrative shifting - which has been done brilliantly.
- I have to fight hard with myself to go long in this market, because I don’t believe in it - but the bulls are in charge right now. The market, by default, just wants to go up. The vast, vast majority of market participants are buy and hold - not traders. So the market will always be bent to the upside.
- Until the market finds that cliff it’s going to run off (eventually), I’m going to bend my brain to the long side. If I can find any reason to go long - I will. Probably.
- I have been staying away from events - meaning I’m always out of my position ahead of the ones that matter. THat’s proven to be effective. Trading the follow-on wave works very well once you let the market figure out what way it wants to go (not always clear in the first 5-10 min how it wants to process the data)
- This will be important this week because we’ve got events each day starting on Tuesday.
- So, technicals.
- We bounced right off the 200MA on both SPY and QQQ last week. I don’t see us testing the 200MA again until some seriously bad data drops or FOMC.
- The Daily on SPY + QQQ say we’ve got plenty of room to run
- 30M says we need to pullback first (Monday)
- The Weekly on SPY is neutral. QQQ says we’ve got room to run.
- DXY spent the back half of the week cooling off — 105.30 is tough for it to crack. I expect it to grind sideways in 104 range until Friday on NFP - then it will move big. It’s going tick for tick on NQ/QQQ though. DXY up, QQQ down. DXY down, QQQ up.
Technicals (Latest):
- QQQ 200 MA: 290.06
- SPY 200 MA: 393.14
Expected move (per options chain)
- QQQ +/- 7.84
- SPY +/- 8.50
Trading Plan (This Week):
- Current position: I’m currently short NQ. I’ve got 50 point stop loss and a 100 point closing order. (OCO)
- I’m looking for a pullback overnight/Monday from where we are now
- I’ll be looking for spots to go long
- QQQ 293 I’d buy with both hands
- QQQ 313 I’d short with both hands
Invesco QQQ Trust Series 1 - QQQ
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