AMZN, AAPL & AMD In Focus This Week

Can S&P top Thursday's "bearish reversal" high?

We ended the week on a tricky two-day sequence. Thursday’s gap-up put us at new YTD highs, but the ensuing flush ended as a bearish engulfing candle, where Thursday’s open was above Wednesday’s high, but Thursday’s close was below the prior session’s low. 

That’s nasty price action and caught a lot of investors off-guard. But on Friday, they gapped it up again, catching all the late-day shorts offside as well. 

Today’s the last day of July, so we could see some early month in-flows give the markets a boost this week. Of note, we have AMD and SBUX reporting on Tuesday and then the big ones: AMZN and AAPL reporting on Thursday evening. 

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We opened okay on Globex (Sunday night) and the morning action has the ES bulls looking fine. The question is, will they push the markets higher into AMZN/AAPL or will we sort of chop around until the news is out? 

So far earnings have been hit or miss — especially from mega-cap tech — although it hasn’t seemed to do much to the indices. The early flows for August could certainly give the ES a boost, especially if “thin to win” is in play. 

My thoughts here are really two-fold: 

1. The market remains in an uptrend, and that’s why even with Thursday’s nasty reaction, we stressed the need to stay patient and see how it develops. That said, we are extended and taking a breather in August/September could set us up for a nice Q4 push. 

2. The Russell and Dow have been on fire this month, especially the latter. That’s not to say the S&P and Nasdaq have done bad — they’ve done quite good — but the YTD laggards were the Russell and Dow and they’ve since gained some momentum. Will we continue to see a rotation into these names?

Technical Edge 

• NYSE Breadth: 74% Upside Volume

• Advance/Decline: 71% Advance

• VIX: ~$13.75

Just one note before we kick some charts around, keep an eye on rates today. The TNX (10-year yields) were active on Thursday and didn’t help the equity markets, but those yields fading below 4% did help give us a relief bounce. 

At some point, a correction will be needed — either through time or through price — but for now, bulls remain in control.  

SPY

Sitting above that ~$456.50 area of prior resistance, let’s see if the SPY can push above this mark and clear the 78.6% retrace of Thursday’s range at $457.75. That happens to be Friday’s high too (approximately). 

• Pivot: $456.50

• Upside Levels: $457.50, $459.40, $460.35+

• Downside Levels: $455, $453, $451.50

SPX

Nice 15-min chart highlighting the lower highs with Friday’s high/resistance at the 78.6% retrace near 4590 and support at 4565. A break of either level could create a further move in that respective direction. 

• Upside Levels: 4590, 4605-10, 4625-30

• Downside Levels: 4565, 450-52, 4537-42, 4528.50

S&P 500 — ES Futures

We had a consolidation day on Friday. Let’s see if the ES can regain Friday’s 4616.50 high and push higher or if it struggles with this level, as it’s doing in Globex. 

• Pivot: 4616.50

• Upside Levels: 4625, 4634, 4646-50

• Downside levels: 4590, 4577, 4567

NQ