Friday - I ended solidly green with those overnight calls + buying puts right at the top (rare for me!) - all shortly after the open. Only problem was I paperhanded the puts. 🤡
Opposite of last week (data everywhere!), there’s almost nothing happening this week on the macro economic calendar.
Reminder: AAPL is October 27 (next week), including rest of Big Tech.
As I’m a terrible earnings trader and there’s almost nothing to trade on economic data, I don’t foresee trading much this week.
My current thesis is that when AAPL cracks on earnings - this quarter or next - that’s your Big Finale crash we’re all expecting. Almost every other domino has fallen.
None of us know what really happened on Thursday last week. I don’t think it was any one thing. I think it was several technical and mechanical things that converged on each other to way outsize what normally would have happened. The CPI print was not good but it also wasn’t unexpectedly horrible, but that isn’t what caused it alone. It was not a ‘this is the bottom’ moment by any stretch.
Fed Pivot isn’t happening right now. I don’t know what that group was thinking. I do think there’s some merit to a ‘peak everything’ bull run though. Peak earnings, peak inflation, Peak JPow fear. I only see this happening IF Apple doesn’t scare anybody AND JPow gives just a little hope that rate hikes might slow down (NOT pivot).
That said, I don’t think this is likely to happen right now. More likely to be next quarter’s earnings report, if at all. For this earnings season, I think we’re going to get Apple and the gang acting like no big deal and JPow continuing to bring the heat and very strong chance of him hinting that he’s going to do at least another 75bps after Nov 2 one (the market is expecting 50bps after Nov 2 hike). Further to that, I expect to see them update the expected Fed Funds rate at some point - causing another hard flush down.
We’re not there yet. So where do I think we are right now? Consolidating with a lean to bullish. Earnings are going to be okay/not bad among the majors again and we’ll get a little run on that.
November 2 is coming though and I don’t think the bulls are going to like what Daddy JPow has for them in the Q&A session, especially with stubbornly high inflation and stubbornly low unemployment.
DXY and TNX remain critical to everything. UK is a clown car right now which will only keep pushing DXY up unless they get it together.
Thoughts - Technical:
SPY levels: 350, 355, 358, 363, 373 (no change)
Chart - Weekly: Bearish - trend down continue…we know where we’re going…but it does look due to a bounce this week.
Chart - Daily: Neutral - mixed chart at best. MACD is looking both ways confused.
Chart - 4h: Neutral - lean bullish for this week
Trading Plan (Monday):
I have no position currently.
As noted, there’s not much here for me this week. If I had a hobby, I’d go do it this week.
I will be keeping an eye on international markets - the DXY + Inflation is going to break a country at some point.
I’ll be tempted to slow add a put here or there at SPY levels noted above just in case something does blow.
Putting the long-term SPY chart below just so you can see where we are on the projected path….
