S&P, Nasdaq Near Possible Resistance
Technical Edge —
NYSE Breadth: 74% Upside Volume
NASDAQ Breadth: 69% Upside Volume
VIX: ~$21.75
Game Plan: S&P 500, SPY
The markets are going to open a little hot today, with AMZN, AAPL and big oil (CVX and XOM, which are ~45% on the XLE ETF) all up after reporting earnings.
That said, there are some mixed signals out there too. INTC and ROKU are down badly after reporting earnings, while ARKK continues to languish.
While “that’s okay” for us, ARKK’s drag shows that there is some lag in growth assets. Typically, we like to see these stocks showing some leadership, furthering the idea that investors are embracing a “risk-on” attitude.
We’ll see what today brings, but the major indices are approaching some major zones. Yesterday’s rally was impressive, but the breadth was not.
S&P 500 — ES
I thought we could see 4100 this week, but I did not think we would get another 60-handle rise in the ES on Thursday!
The ES is now running into prior support near 4100 (hence that being the target yesterday), as well as the 21-week moving average.
Just above this area, we have the June high at 4189 — not that it will matter that much once we start August trading next week — as well as the weekly VWAP measure. Lastly, the 4100 to 4200 zone was a big support area throughout Q1 and the first half of Q2. But in late-May early June, it became resistance.
I tend to view support as support until it fails…and resistance as resistance until there’s a breakout.
For now, I’m going to look at this area as possible resistance until the ES can push above it.
S&P 500 — SPY
Like the ES, we also got our test of $407 we were looking for yesterday. That was prior support in late May and early June before it failed and the market moved lower.
From here, I mostly want to see how the SPY trades from here. An open above $407 and yesterday’s high and a fade back below it would have me cautious about the short-term — especially if the SPY can’t recover this area.
Ideally, I would like to see the SPY stay above $400. The 21-week moving average looms around $410.50 and could be resistance.
Nasdaq — NQ
All of these are similar to me. The NQ is rallying toward 13K, which was a prior support level turned resistance.
I am cautious as a result. If it can clear 13,200 — and thus the 50% retracement, the June high (and the July high if the move comes next week), the 21-week moving average and the weekly VWAP measure — then I will be a believer on the move to 14,000 to 14,250.
For now though, I’m cautious.
Nasdaq — QQQ
$314 to $315 is a possible resistance area. Above that could put $318 in play. On the downside, $300 to $296.50 is a key area for me. If it fails, bulls will lose a significant amount of control.
CHNG
This one trades a little less volume than I’d like, but the setup looks great. The breakout level is $24 with the 10-day near that level as well. If we get a dip to this zone, I’m looking at a buy with stop-loss probably near $23.25 to begin.
Go-To Watchlist — Individual Stocks
*Feel free to build your own trades off these relative strength leaders*
Numbered are the ones I’m watching most closely.
Bold are the trades with recent updates.
Italics show means the trade is closed.
Trade Sheets: We have been limited in the quantity of trades this month, but not limited in quality!! Some really nice moves lately.
MCK — We have hit two trim zones so far on MCK. Feel free to cash the last ⅓ of the position as you see fit. $335 to $340 is a potential upside target (and has since been hit).
Moving stop-loss up to $315 and given the consolidation, I am thinking of holding my last ⅓ for a push to $348 to $350.
PEP — Beautiful move into the $175s! I am trimmed down to a ½ position with a break-even stop & looking to trim down to a ⅓ or ¼ position into $177 resistance.
COST — Absolute banger of a trade, now trading $535 plus and we are down to a ⅓ position. I would consider moving to a stop-loss of ~$520 (profitable vs. our cost basis) and just letting this one ride a bit.
Relative strength leaders (List is cleaned up and shorter!) →
O
CNC
HRB
ENPH
CHNG
COST
PEP —
BA — beauty
ABBV
UNH
XLE
VRTX — really nice action lately.
MCK — trying to break out.
Economic Calendar
