QQQ - Invesco QQQ Trust Series 1 22:50 PM - Mar 12 2023
by: Maverick

Stock Market Week Ahead: March 13, 2023 - QQQ 280-300 range; Special Banking Announcements + CPI + PPI + Retail Sales

Economic Calendar
  • Monday: Nothing.
  • Tuesday:  CPI @ 0830, FOMC Bowman @ 1720
  • Wednesday:  PPI, Retail Sales, NY Manu @ 0830
  • Thursday:  Jobless Claims, Housing Data, Philly @ 0830
  • Friday: Industrial Production @ 0915, UMICH @ 1000
  • NEXT Week: FOMC

Market Thoughts:
  • Last week:  SIVB collapse wasn’t on my bingo card, but that created systemic risk concerns in the market quickly.  We pulled back quite a bit and ripped through key support levels on both QQQ and SPY.
  • Economic calendar:  CPI, PPI, Retail sales and UMICH are on deck this week.  Week 2 of the economic data party…..
  • Bears took the reigns last week with the systemic banking risk fears in their favor and the 50bps move on Fed Watch being 80% likely for next FOMC.
  • The bearish case remains squarely in deteriorating fundamentals in the face of rising rates.
  • The bullish case is technical and narrative shifting (never seems to stop…)
  • With the chaos of last week, the DXY correlation with QQQ changed.  It started trading INLINE with it instead of INVERSE of it.  This is the economy/recession trade vs the Fed/inflation trade in play.  I am not sure if it will stay that way with the banking chaos going on - but it’s important to keep an eye on it.  That can really mess up your inputs like it did for me last week.
  • Let’s talk about everything going on tonight (Sunday)
  • Fed came to the rescue of depositors, providing full backing for 100% of deposits.  This is unheard of.  It’s normally only 250k per depositor provided by FDIC.  They say that tax payers won’t cover this, but the banks will - but we know that means it will flow down to the end customer.  So while not technically the taxpayer, still the same group of people. Slick.
  • They did NOT however provide a bailout for the bank and its management.  They basically said - manage your house or lose it.  We only care about the customers and their faith in the banking system.
  • This was a stroke of genius on the part of the Fed.  This backs the consumers/economy with confidence and puts the banks in check (way overdue).
  • With this news - and a second bank being closed for similar problems (SBNY) — Fed watch fliped to 25bps to 84% - it was 80% 50bps on Thursday - https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
  • The futures ripped up 1.5% on this news.
  • CPI is coming out on Tuesday morning, but I won’t be trading it - it’s looking like a mixed one.  If there’s shock to one side or the other, I’ll jump in in the waves an hour later.
  • PPI (Wednesday), however, is expected to slow down quite a lot - that could be interesting (bullish).
  • The NFP news on Friday was actually bullish - adding jobs + lower wages.  It just got totally lost in the 0DTE volatility + overwhelming focus on banking news.
  • There’s going to be an address from Biden about banking system.  I wouldn’t be surprised to see JPow pop up somewhere, as well making everybody feel good.
  • All this to say, I think we’re looking bullish for Monday.  I expect a gap up from wherever we open up, regardless of where futures push it.
  • Beyond that, we’re going to need to see what all announcements are made.  I’m less interested in technicals for the next 48 hours because Fundamentals always….always…trump technicals - and we’ve got several incoming.
  • This is going to be an exciting week, no matter what - so keep your stops in to protect your downside — and stay agile.  Between major economic announcements and 0DTE stupidity, roller coaster for sure this week.

Technicals (Latest):
  • QQQ 200 MA: 290.09
  • SPY 200 MA: 393.16

Expected move (per options chain)
  • QQQ +/- 12
  • SPY +/- 10

Trading Plan (This Week):
  • Current position: I traded the rip on Sunday night with NQ after I saw Fed announcement.
  • I’m just looking for another spot to go long, expecting a rip up at/before the open.
  • I plan to write a Wednesday update to see where we are then.



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Invesco QQQ Trust Series 1 - QQQ

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