Monday, November 28th, 2022 Market Preview
The holiday week last week gave the market a low volume week that gave the bulls a weekly close above 400. The big question heading into this week is will the rally keep going with JPow speaking on Wednesday? We have a host of data this week that can certainly add fuel to this rally or start the reversal back down.
On Monday and Tuesday, we have no major data coming in, so the bulls can keep the momentum going without much fear to start the week. However... Wednesday brings the heat. Here is what we are looking at for Wednesday:
On Monday and Tuesday, we have no major data coming in, so the bulls can keep the momentum going without much fear to start the week. However... Wednesday brings the heat. Here is what we are looking at for Wednesday:
- EU Inflation Data in premarket - this will have DXY implications.
- US ADP Employment Data at 8:15am EST - Minor Jobs data report
- US GDP at 8:30 EST
- US Wholesale Inventories and US Corporate Profits at 8:30am
- ⚠️ JOLTS Job Openings - 10:00am - Very important report to see if the pace of hiring is slowing
- ⚠️ Jerome Powell Speech at 1:30pm - The main event of the week. Let's break this one down a little more below.
It is rather peculiar that JPow is talking a day before the Fed has its 2 week blackout period heading into the December 14th FOMC meeting. Will he be Dr. Doom or will this be a nonevent? All eyes will be glued to every word he says in hopes to give us a sneak peak at what to expect in the Dec meeting. My hunch is he comes in very hawkish and tries to shift the focus from the 50 BPS rate hike coming and push more of a hint that the Federal Funds rate is headed much higher for longer. I also anticipate him to really concentrate on the jobs market still being too hot to even think about slowing the rate hikes down. However, if he comes in even a little bit dovish, the market will rocket up to a possible 430 test in the next 2 weeks imo. Again, all eyes on him Wednesday.
Current Positions and Plays -
- I continued my scalp strategy against my SPX Feb puts. I am currently only holding the core position and will most likely take a small position in calls as a hedge heading into JPow's speech.
Economic Data this Week (all times are EST)? -
- Check the full calendar here: stonks.chat/feed/catalysts
- This week is jammed full of data and I have highlighted Wednesday above.
- Thursday - PCE inflation data in premarket
- Friday - Nonfarm Payrolls at 8:30am - This is a sneaky one to look out for. A lot of attention will be placed on Wednesday and Thursday's data. But this one is just as important.
THE PLAYS OF THE WEEK for SPY:
- Monday and Tuesday - We don't have any economic data releasing on either day so suspect the bias will be to the upside. With possible de-risking happening at the end of the day on Tuesday. I will be playing very small scalps these two days and will add to my core put position if the SPY tests its 200MA.
- Wednesday - This is a huge data day, so I will be doing a small call hedge before JPow speaks just in case he wants to give the bulls a Christmas gift. But the real move will happen after he is done, so I may just tag along after the speech. I am not sure just yet.
- Thursday - We have inflation data in the morning and if it comes in cool, this could cancel out any of the hawkish tone that may come in from JPow. I would expect though a continuation move though from JPow regardless of what this data shows. So I am not putting too much weight in this report.
- Friday - Depending on the topics that JPow focuses on Wednesday, the Nonfarm payroll data could be a massive report for the market. If my theory is correct that he is shifting to the labor market as the focus, then this report sets up for a nice strangle opportunity in premarket. So I will be looking at doing just that IF Jpow talks heavy about the jobs market on Wednesday.
SPY Technicals -
- SPY Technicals - The 30 min, 1 hour, 4 hour and Daily charts are all almost overbought. This rally seems to be running out of gas technically. But with the data this week, we could see the rally recharge itself up.
- SPY is approaching its daily 200MA at 404.79. This MA was the top of the last bear market rally.
- SPY Fibs for ATH to June 2022 low - 390 is the .236 line. I expect us to retest this line soon and most likely it turns into support. 407 is the .382 line. That level is near the 200 Daily MA as well, so I expect that to be the target for this rally.
- SPY Fibs for COVID low to ATH - 380 is the .382. 418 is the .236.
Levels I am Watching
- $SPY - levels 390 > 393 > 396 > 400 > 403 > 405 > 407 > 410 > 413
- 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.
- This is not financial advice
SPDR S&P 500 - SPY
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