ES/SPY Weekend Look (Feb7-11)
Here is the weekend look at the ES/SPY for the trading week of Feb 7-11. The ES started out last week at the 200 sma and the bottom of the red neutral box. Price rallied hard for 3 days above the 200 and into the top of the neutral box where it ran into fib resistance. Price gapped down on Wednesday night after an earnings miss from FB. The following night price gapped back up on AMZN earnings only to fall again and retest the 200 sma Friday morning before making a rallying 50 points into the close. The ES finished the week in the middle of the neutral between the 9 & 21 emas and above the 200 sma.
Suffice to say it was another volatile week of price action. The move off the Jan 24th low to the top of the neutral box was an incredible 8% move in about 7 days. The ES now sits about 6.5% off the Jan 24th low. Weakness in tech and growth names has been offset in the S&P by strength in Energy, Financial, Healthcare & Consumer Staple sectors helping it maintain relative strength. The weekly close between the emas and at the center of the neutral box, means my bias is neutral going into this week.
Going forward my bias would change to bullish if price moves above the red box. Conversely a move below the red box would change my bias to bearish. Wild swings in both directions tells me that the market is in a period of indecision and will need new information to push it one way or the other. Other than the very important CPI data on Thursday this week includes earnings from highly watched growth names such as TTD, BABA, ROKU, SHOP & PLTR. The earning results plus CPI data have the potential to move the market a huge amount in either direction. So watch these event closely for clues as to where things go from here. If there is a move above the red neutral box I will be targeting ATHs again. If there is a move below the red neutral box first support is at 4200. If 4200 was to fail the ES is likely to have a compound corrective move into 4000 or lower.
I would expect option premium to be very high so be cautious with naked long CALLS & PUTS. Even if you get the direction right premium crush can kill your position. Much better odds selling premium in this environment IMO.
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Weekly Events...
Monday... Earnings from... CAR, ANET
Tuesday... US International Trade.. Earnings from BABA, ABNB, DVN, RBLX, SEDG, UPST, VIAC, AKAM
Wednesday... Crude Inventories.. Earnings from CROX, SHOP, TTD, AMAT, CSCO, DASH, FSLY, NVDA, GBLE
Thursday... Jobless Claims, US CPI Earnings from BIDU, PLTR, WMT, YETI, RDFN, ROKU, SHAK, QDEL
Friday... Univ. Michigan Sentiment Earnings from DE
Bullish Notes...
Potential positive reaction to CPI data
Strong earnings results causes short covering
10 year yield drops back below 1.8%
Bearish Notes...
Price below 200 sma, 9/21 emas & below red neutral
Potential negative reaction to CPI data
Weak earnings from key growth stocks
10 year yield moves above 2%
Ukraine/Russian tensions
Inflation worries
Market mentality flips from buy the dip to sell the rip
Suffice to say it was another volatile week of price action. The move off the Jan 24th low to the top of the neutral box was an incredible 8% move in about 7 days. The ES now sits about 6.5% off the Jan 24th low. Weakness in tech and growth names has been offset in the S&P by strength in Energy, Financial, Healthcare & Consumer Staple sectors helping it maintain relative strength. The weekly close between the emas and at the center of the neutral box, means my bias is neutral going into this week.
Going forward my bias would change to bullish if price moves above the red box. Conversely a move below the red box would change my bias to bearish. Wild swings in both directions tells me that the market is in a period of indecision and will need new information to push it one way or the other. Other than the very important CPI data on Thursday this week includes earnings from highly watched growth names such as TTD, BABA, ROKU, SHOP & PLTR. The earning results plus CPI data have the potential to move the market a huge amount in either direction. So watch these event closely for clues as to where things go from here. If there is a move above the red neutral box I will be targeting ATHs again. If there is a move below the red neutral box first support is at 4200. If 4200 was to fail the ES is likely to have a compound corrective move into 4000 or lower.
I would expect option premium to be very high so be cautious with naked long CALLS & PUTS. Even if you get the direction right premium crush can kill your position. Much better odds selling premium in this environment IMO.
Please like my post if you find it helpful.
Weekly Events...
Monday... Earnings from... CAR, ANET
Tuesday... US International Trade.. Earnings from BABA, ABNB, DVN, RBLX, SEDG, UPST, VIAC, AKAM
Wednesday... Crude Inventories.. Earnings from CROX, SHOP, TTD, AMAT, CSCO, DASH, FSLY, NVDA, GBLE
Thursday... Jobless Claims, US CPI Earnings from BIDU, PLTR, WMT, YETI, RDFN, ROKU, SHAK, QDEL
Friday... Univ. Michigan Sentiment Earnings from DE
Bullish Notes...
Potential positive reaction to CPI data
Strong earnings results causes short covering
10 year yield drops back below 1.8%
Bearish Notes...
Price below 200 sma, 9/21 emas & below red neutral
Potential negative reaction to CPI data
Weak earnings from key growth stocks
10 year yield moves above 2%
Ukraine/Russian tensions
Inflation worries
Market mentality flips from buy the dip to sell the rip
So not as heavy in the big growth names but still a few like NET & UPST
Here is the correct list.
Monday... HAS, TSN, AMGN
Tuesday.. HOG,PFE, CMG, DOCS, APPS, ENPH, LYFT, PTON,PAYC
Wednesday... CGC, CVS, DKNG, YUM, PEP, SONO, TWLO, UBER, DIS
Thurs... AZN, GOOS, TWTR, AFRM, NET, ILMN, UPWK, YELP, KO
Fri... CLF, UAA, IMGN