Weekly Market Preview - December 27th, 2022
Last Week Recap -
We had quite a bit of fireworks last week with the market having a few breakdowns to the 376 test. The cracks in the bull thesis is starting to show and market participants are starting to lose faith. The top 3 things from last week that mattered to me were:
- TSLA is in free fall. Margin calls starting to hit retail with nearly $5 billion in margin calls alone on Friday for Tesla. The daily chart for TSLA looks like a 5 min flush down. There is going to be a pop at some point for TSLA just based on the technicals. But until that pop happens, it is anybody's guess where the bottom is.
- David Tepper goes on CNBC and calls out people fighting the Fed. The billionaire hedge fund manager says he is going to take the central banks serious and is now leaning short in the market. If you have not seen this interview, please find it and watch the full version.
- PCE Core inflation comes in sticky. Headline goes down, but the core is showing signs of slow decline and stickying at the current levels. This is another headwind for the Fed to keep an aggressive approach.
There will be a lot of chatter about a Santa Rally this week. Historically, the last 5 days of the trading year finish on an uptrend. Will it happen this year?
My Prediction -
With the low volume week ahead on a shortened holiday week, it is really tough to play either side with much confidence. I have a rather large core put position for the end of February, so I am going to ignore it this week. It will be all about small scalps and not get married to any trend that shows up this week. I know a lot of folks will tout the Santa Rally, but I am not going to put much faith in that. So it is all scalps for me with an expectation of a max +/- 2% move on the week.
Current Positions and Plays -
- I am holding core ES puts for Feb 28. I will look to add to these at SPY key levels on a retests of major levels.
Economic Data this Week (all times are EST)? -
- Check the full calendar here: stonks.chat/feed/catalysts
- This week is pretty light due to the last week of the year
THE PLAYS OF THE WEEK for SPY:
- If you are not comfortable scalping, I would sit this week out. I am going to be in and out of plays very fast and will look to add to my core puts if we test 390 on the SPY.
SPY Technicals -
- SPY Technicals - The 30 min, 1 hour, 4 hour, and Daily charts are all neutral.
- SPY is now under its 50, 100 and 200 MA averages on the Daily chart.
- SPY Fibs for ATH to June 2022 low - 390 is the .236 line. There is a possibility for us to retest this line soon and most likely it turns into resistance.
- SPY Fibs for COVID low to ATH - 380 is the .382. If this level falls on the weekly close, it could lead to a major push downward.
Levels I am Watching
- $SPY - levels 373 > 376 > 380 (major) > 383 > 386 > 390 (major) > 393
- 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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