Stocks Surge Into Opex, but Can They Sustain the Rally?
Our individual stock trades are igniting!
Technical Edge
NYSE Breadth: 57% Upside Volume
Advance/Decline: 59% Advance
VIX: ~$16
We’ve got a pretty low VIX and some interesting action lately after yesterday’s low-breadth squeeze. Thursday’s action felt more like shorts being forced to buy vs. longs sizing up and getting long.
Interesting action though and there’s no doubt Opex is playing some games here. DXY ripped yesterday right into our target zone. Bonds are making new lows on the move, now near 10-week lows, while the 10-year yield (TNX) is near 10-week highs.
Odd price action to see in the face of an S&P rip.
While we’re getting a range break in the indices, our individual stocks enjoyed another wave of momentum yesterday. Cheers
S&P 500 — ES
Cleared 4200, stalled near our 4220 level as it sits between yesterday’s two “bolded” zones of 4198-4206 and 4242. Which one comes first?
Upside Levels: 4220, 4242-45
Downside levels: 4200, 4175
SPY
Daily-up and rip.
Upside Levels: $421.22 (gap fill)
Downside Levels: $418, $414 to $416 (prior resistance)
On an intraday basis, I will be looking to buy a dip in the SPY and SPX. Above is the 15-min look. Ideally, I’d like the 30-min, as we are on Day 3 of the move.
However, I am keeping an eye on yesterday’s resistance level — $417.50 to $418 on SPY, 4175 to 4180 on SPX), along with the Q1 high and 10-ema on the 15-min chart. If that zone is tested early on, I will likely try a day-trade long in that zone.
SPX
Upside Levels: 4200, 4220, 4245
Downside Levels: 4187 (key for me), 4150-55 (big prior resistance)
One scenario that stands out for me is, can the SPX hold 4187? It doesn’t seem important, but if it breaks this area — and we give it a few points to find its footing, of course — and can’t regain it, then maybe we get a retest of that 4150 area.
QQQ & NQ
Not much more to say about these two. The Nasdaq has blown through every upside target we’ve laid out. Let’s let them reset before trying to re-engage.
DXY
We covered DXY earlier in the week, but it gave a swift move into the 103.30 to 104 area that we had been talking about.
If we get some weakness today, it could act as a tailwind for the S&P. That said, yesterday’s DXY strength did not act as a tailwind, so don’t look at it as a 1:1 correlation.
For those long, congrats.
TLT
Doesn’t have the best look to it as TLT continues to melt lower. Let’s see if it can find its footing in the $100 to $101 area. If it gets that far, I suspect buyers will emerge, if only just for a bounce.
Now down in five straight sessions.
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.
Down to Runners in GE, CAH, LLY, ABBV, AAPL, MCD & BRK.B. Now Add META and AVGO.
META — 3 trims and now new highs on the move. Down to a runner and look for $250 to $255.
CRM — Took time, but got our $207-$208 trim down, now down to about a 40% position after $212.50 touch. Probably down to ¼ position if we see $215-ish now, but want runners for potential push to $220.
Raise stops to Break-even.
AVGO — long from weekly-up at ~$633 — first trim near $640, second trim at $645+, third trim $650 to $655+. Left room to go to $675-$677, which it just did. Out or if you want to leave a runner and stick with some, go for it.
UBER — long from $37.50 or just below — First trim $38.50-ish, second trim down to ½ position at $39 to $39.25.
Ideally we want $40 to $40.40 to get down to runners or out exit. Breakeven stops.
Go-To Watchlist
*Feel free to build your own trades off these relative strength leaders*
Relative strength leaders →
MCD, PEP & KO, WMT, PG — XLP
LLY, CAH
NVDA, CRM
MSFT, AAPL, META
LULU, CMG
Relative weakness leaders →
PYPL
MET
CF, MOS
PFE
GLOB
Economic Calendar
