June Quarterly Opex Is Here and So Is a 3-Day Weekend
Don't be afraid to turn it into a 4-day weekend 👍🏼
I was bearish coming into this year, but as you know I have had a much more bullish bias over the last few months. When the flow of the market changes, you have to change too; the market has no problem draining your account because of stubbornness.
Many traders were looking for volatility expansion this week. I know I was too, given that the S&P 500 had rode a four-week win streak into year-to-date highs with the CPI, PPI, Fed, Retail Sales and quarterly Opex all on tap.
Yet it hasn’t mattered one bit.
The VIX did creep up — rallying 4.5% yesterday, interestingly — but by and large, the shorts keep taking it on the chin. The S&P is on a six-day win streak, its longest stretch since Nov. 2021, while it looks to extend its weekly winning streak to five in a row.
Given that it’s up about 3% so far this week, it seems likely to get it.
Trading today is not for the faint of heart. It’s quarterly Opex, where the unwinding and rolling of futures and options contracts are going to drive the action — “action” of which can be quite sloppy. There’s a reason many experienced traders don’t bother with trading these sessions.
It’s not that it’s impossible to do so, it’s that they tend to be sloppier and choppier and it’s much easier to trade into Opex and after it than on it.
Of course, we also have the Monday holiday as well, so we’re going into a three-day weekend — which is even more incentive for experienced traders to turn it into a four-day weekend.
That said, it’s hard to turn from bull to bear, but at some point, this rally will be too tired to keep going in the short term. It doesn’t help that we are getting overextended and that the seasonalities beyond June Opex are not great. That said, I’d rather stick with the trend here until it fails rather than guess on when it will fail. It’s hard to be a seller into higher highs and higher lows.
Technical Edge
NYSE Breadth: 84% Upside Volume (!)
Advance/Decline: 76% Advance
VIX: ~$14.50
S&P 500 — ES (September Contracts)
The ES is now up 180 points from last week’s low to this week’s high, or 4.16%.
Thought Out Loud: Can we get a dip back down to the 10-day ema and the 50% to 61.8% retracement zone between 4396 and 4375?
Upside Levels: 4485, 4500, 4512, 4522-25
Downside levels: 4460, 4440, 4420-25, 4390-4400
A quick glance at the 4-hour chart. If we get the 10-ema on the 4-hour to align with the ~4460 area (aka overnight support), that may be worth a shot on the long side.
SPX
As for today’s levels:
Upside Levels: 4375, 4392 (Fed Day high), 4425
Downside Levels: 4338, 4322-25, 4311, ~4300 & 10-day ema
SPY
If the SPY fell 2% to 2.5% today, it would feel like a gut-punch to longs. But I’ve got to say, it would be quite healthy from a technical perspective.
Upside Levels: $444, $445.25, $447
Downside Levels: $441, *$439 to $440 (intraday), $433-$435
Above is a 15-minute and 1-hour look at the SPY. If we see ~$441 early in the day (aka the 10-ema on the H1 chart and a prior consolidation level from yesterday), that may be worth a dip-buying spot.
NQ
It took the NQ more than five full months to rally 3,700 points or 28%. In the last six days though, it’s up more than 1,000 points or 7%. Pretty impressive for the bulls.
Upside Levels: ~15,575-80
Downside Levels: 15,300-325, 15,240-50, 21-sma on the H4 chart.
If the NQ trades down to the 15,300-325 area early, let’s see if buyers step in. That’s the Globex low and overnight support, as well as the 10-ema on the H4 chart.
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.
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Down to Runners in GE, CAH, LLY, ABBV, AAPL, MCD & BRK.B. Now Add META, AVGO, UBER, CRM, AMZN and CVS.
** TLT — I don’t know if we’ll fill the gap at $99.65-ish, but I will get long if we trade the mid-$99s and it holds as support. Still Stalking
Go-To Watchlist
*Feel free to build your own trades off these relative strength leaders*
Relative strength leaders →
Growth stocks ARKK — DOCN, PATH, CFLT, SHOP
LLY, CAH
AI stocks — NVDA, AMD, AVGO, ADBE, SMCI
Mega cap tech — MSFT, AAPL, META, CRM
Select retail — CMG, ELF
Homebuilders ITB — TOL, KBH, DHI
BRK.B
ABEV, DXCM (on breakout watch)
Relative weakness leaders →
PYPL
MET
CF, MOS
PFE
EL, FL, DG
Economic Calendar
