All Eyes on Jerome Powell
We're within spitting distance of last week's low
With Powell due up this morning, let’s keep things light.
The bulls’ main risk is today’s slight gap-up gains. If we open slightly higher, then flush lower to take out the low, that’s not a good look. That’s as we linger within spitting distance of this week’s low and last week’s low (both within 1% of yesterday’s closing price for the S&P 500).
If we go weekly down below last week’s low and close below that level today, that’s going to be a problem for technical traders. Further, it would have me on watch for a potentially larger correction (like the one we laid out on Monday under the ES).
Technical Edge
NYSE Breadth: 25% Upside Volume
Advance/Decline: 24% Advance
VIX: ~$17
SPY
In so many words, the S&P failed right where bears needed it to…and did so in spectacular fashion. Not only did it fade hard on NVDA’s better-than-expected results, but it also put in a nasty bearish engulfing candle, opening above the prior day’s high and closing below the prior day’s low.
Upside Levels: $441, $443.50, $445.25
Downside Levels: $436.86, $435 (this week’s low), $433 (last week’s low)
SPX
Upside Levels: 4375, 4360, 4335 (last week’s low)
Downside Levels: 4440-43, 4425, 4400
S&P 500 — ES Futures
The ES had us cautious going into Thursday’s session because of its fade on Globex. Now looking just as bad as the SPY and SPX, we really need to keep an eye on that 4350 area.
Upside Levels: 4425, 4436-40, 4452, 4466
If we lose 4372-78…Downside levels: 4348-50, 4320, 4300, 4280
NQ
Upside Levels: 15,000, 15,100, 15,250, 15,340
Downside levels: 14,820, 14,785, 14,720, 14,610
QQQ
Wow. We failed right in that $372 area mapped out from yesterday, but what a nasty bearish candle we got afterward. It’s one thing to fade…it’s another to do this:
Upside Levels: $366-67, $370, $371.75 to $372.75
Downside levels: $361, $359 (this week’s low), $354.75 (weekly-down)
Open Positions
Bold are the trades with recent updates.
Italics show means the trade is closed.
Any positions that get down to ¼ or less (AKA runners) are removed from the list below and left up to you to manage. My only suggestion would be B/E or better stops.)
** = previous trade setup we are stalking.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Down to Runners in GE, CAH, LLY, ABBV, AAPL, MCD & BRK.B. Now Add META, AVGO, UBER, CRM, AMZN, CVS, AMD, TLT and YM.
JPM — Many are long from $143-145. This is a longer term swing. Trimmed $153s, then $157.50+ on 7/24.
Down to ½ position vs. Break-even stop. Can make small, ~10% position trim if we see $160+
If worried about a larger correction, can sell/trim north of $150 and look to re-establish lower (if we get it).
XOM — Long from the monthly-up area at $108.50 — First ¼ or ⅓ trim is ~$112.50. Stops at $104.
CRM — long from ~$200 — Trimmed at $207, $209+ and $210. Down to ⅓ or runners here. $213-$215 is the next trim zone.
QQQ — Down to ¼ or less (aka runners). Congrats
These went from the $2.50 to $300 range up to $8.00 on Tuesday’s open. Remainders should be $12.00+ on Thursday. Exit the runners, IMO.
Go-To Watchlist
*Feel free to build your own trades off these relative strength leaders*
Relative strength leaders →
LLY
Energy stocks — VLO, SLB, EOG
AI stocks — NVDA, ADBE
Mega cap tech — GOOGL, AMZN
Select retail — ELF, LULU, COST
BRK.B (recent new all-time highs)
CAT
RCL
Relative weakness leaders →
DIS
PYPL
NKE (FL, DKS and China are killing this name).
EL, FL, DG
Economic Calendar
