A Lot to Juggle: Jobs Report, Earnings, Bonds, Weekly Options Expiration
We’ve got Apple and Amazon’s earnings out of the way, but it’s a bit of a mixed bag. Apple was slightly lower after its print, while Amazon is catching a nice pop. Earnings across the board remain mixed, but that discussion will be on the back burner Friday morning as the July jobs report comes into focus.
With the jobs report on deck and the weekly options expiration here, could we be setting up for some sort of rally? Can the 0DTE traders fuel an upside squeeze?
Down three days in a row on the S&P and with buyers showing their willingness to step in yesterday at some key levels has me thinking we could see a bounce.
While it’s too early to say the decline is over — after all, we’re still on a losing streak! — there are reasons to be on the look for a bounce.
As we spelled out earlier this week, I think we could have an intermediate-term decline/consolidation period. That’s as we take stock of all the mixed earnings reactions and pair it with the rising 10-year yield (which hit a new 2023 high yesterday) and seasonal weakness we tend to get from August and September.
Even if that’s the case, it doesn’t mean it will be a straight-down development.
The S&P has suffered a three-day peak-to-trough decline of ~103 points or 2.25% and the sellers look to be getting exhausted in the short term. Let’s see if the buyers can take advantage.
We have been talking about the pain in the bond market for a little while and now we see that Bill Ackman is betting against long-term bonds. Bonds may be short-term oversold, but could still have further to fall — particularly if yields keep rising.
Can we go down further? Of course we can. But there should be trade-able bounces along the way.
Technical Edge
NYSE Breadth: 42% Upside Volume
Advance/Decline: 36% Advance
VIX: ~$16 (hit $17.48 yesterday, it’s highest level since June 1)
SPY
On the downside, bulls need to defend yesterday’s low at $447.37. On the upside, they want to take out yesterday’s high at $450.79, then ideally run the SPY up to the $451.50 level.
If the SPY can’t hold yesterday’s low, it could set up for some weakness down into the mid-$440s, as shown on the daily chart below:
Upside Levels: $450.75, $451.50, $453.50, $455.50
Downside Levels: $447 to $447.50, $444 to $445
SPX
Pivot: 4505
Upside Levels: 4520, 4528.50, 4545, 4546-50, 4565-67t
Downside Levels: 4480-85, 4470, 4555-60
S&P 500 — ES Futures
Below is the 1-hour chart, then the daily chart to zoom out and give a bit more perspective.
The 1-hour chart shows how the 4545 area has been resistance over the last two days, but how that zone sits just below the more vital area between 4550 and 4560.
If the ES can power through this area, it will be an impressive feat (especially once we look at the daily). If it can do so, it puts 4570+ in play.
On the downside, bulls would love to hold the 4515 to 4521 area. If they can’t, yesterday’s low could be on the table.
As we look at the daily chart, look at where resistance is coming into play and where support could come into play if we break yesterday’s low:
Upside Levels: 4548, 4550-60, 4570, 4582-85
Downside levels: 4515-20, 4506, 4493-4503, 4450-60
NQ
Bulls would love to break the NQ up over 15,562, potentially opening the door to 15,625, then ~15,700. Unless Apple plays ball though, that may be difficult today.
(If you look closely, look at that strong wick action from yesterday at the 200-unit moving average, prior breakout level and uptrend support (blue line)).
Upside Levels: 15,540-560, 15,625, 15,700
Downside levels: 15,450, 15,350, 15,275-300
TLT
The $95s held yesterday. If we can get a daily-up, maybe the TLT can make up some of these losses and put together a short-term bounce. If yields continue higher though, the TLT will see more pressure.
XOM
Still watching that monthly-up over $108.50. Note the 200-day moving average just above.
ARKK
Looking to re-engage ARKK if we get a dip into the $44.50 to $45.50 area. That’s a retest of the Q1 and Q2 highs, as well as the 10-week and 50-day moving averages.
~$47.50 would be the first trim spot. $42.50 is a wide stop, but perhaps the best one to use for traders who size small. For “right or right out” traders, $43.50 to $44 could be used as a stop.
Go-To Watchlist
*Feel free to build your own trades off these relative strength leaders*
Relative strength leaders →
(Lack of updates here but these names remain my top focus list!)
Growth stocks ARKK — DKNG, DOCN, UPST, SHOP
LLY, CAH
Energy stocks — VLO, SLB, EOG
AI stocks — NVDA, AMD, AVGO, ADBE, SMCI
Mega cap tech — MSFT, AAPL, META, CRM
Select retail — CMG, ELF, LULU, COST
Homebuilders ITB — TOL, KBH, DHI
BRK.B
ABEV, DXCM
Cruise stocks — RCL, CCL, NCLH
DAL, DT, AMAT
Relative weakness leaders →
DIS → new 52-week lows
CF, MOS
PFE
EL, FL, DG
Open Positions
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