Trading F, MKC and XOM | Jobs Report on Tap
Earnings drove the futures higher in after-hours trading. Can they once the bell rings?
Technical Edge
NYSE Breadth: 80.9% Downside Volume (!)
NASDAQ Breadth: 83.9% Downside Volume (!)
After four swift rallies to the upside, the S&P 500 and Nasdaq were greeted by a wave of sellers. Both the NYSE and Nasdaq registered an 80%-plus downside day, but perhaps we’re starting to find our footing here.
We have talked about a pause/pullback after the big move and I believe this type of digestion — even if swift — is healthy. However, it’s important to see the lows of the range hold.
We can’t say we’re out of the woods yet, but the after-hours action is certainly encouraging. As long as we can build out a higher low from here, the bulls may really start to regain control.
As for some of these moves we’re seeing in the after-hours, I am not too surprised. Snap fell almost 25% on the day, while PINS fell over 10%. Both have been hammered mercilessly over the past few weeks and months, but to see that kind of selling on Facebook’s numbers felt overdone — it was almost as if they had reported the poor results.
I combed the options chains, but the premiums were so inflated I couldn’t find anything with a reasonable R/R ahead of the events, so I passed (not that I’m a big EPS player). Too bad too, because Snap was up a whopping 60% in the after-hours and about 45% in the premarket.
Game Plan
We are enjoying some impressive gains in the after-hours on the back of Amazon and tech. However, we have the jobs reports at 8:30 and that’s bound to add to the mix. If it’s interpreted as a bullish report though, we could have quite the rip and make it a real “Fry-Day,” as they like to say.
If it’s a badly-received report though, it could create some chop.
Update: While the above is still our outlook, the ES has given up its overnight gains and is trading around yesterday’s low. Once the jobs report is out of the way, I’m wondering if that could lean towards the long side as a “sigh of relief.”
S&P 500 — ES
We have looked at the SPY endlessly this week, so let’s look at the ES futures.
Bouncing from the Globex lows, I really want to see last week’s high at 4446 and the 200-day moving average hold as support. If it can hold these levels and bounce, let’s see if it can reclaim the 10-day and 4510.
Above 4510 opens the door to 4528, then 4545 to 4550. Above that and 4580 will be back on the bulls’ radar.
A break of the 200-day puts 4400 back on the table. Below and we’re back into the wide-range chop.
Individual Stocks & Go-To Watchlist — F, XOM, MKC
There are so many post-earnings moves it’s hard to keep up with them, not to mention all of the other mega-moves we’re seeing in this tape. We have been lucky in that our SPY trades have been working out really well all week.
Otherwise, I have been focused on a few individual names here and there, and mostly taking day trades off our Go-To watch list, because that’s where the Relative Strength has been.
Ford
Ford was rejected by the 50-day moving average for the second time in two weeks. Now it’s down about 6% to about $18.70 in pre-market trading.
I am keeping an eye on this $19 range support area, which has been in play for several months now.
Just below that is last week’s low at $18.80 and the 21-week moving average. An undercut of this area and reclaim could get us a low-risk long position going, particularly if the overall market goes into rally-mode off the open.
I will be watching this setup closely.
XOM
XOM has traded really well since reporting earnings. It’s bull-flagging now on the H4 chart. I would love a tag of the 10-day here, followed by a bounce and a reclaim of the prior lows.
That could get another move higher brewing, especially with crude pushing to multi-year highs.
MKC
MKC has been on fire. Aggressive longs can target a dip-buy on the lower timeframes — like the H4 — or even the H1, that’s how strong it’s been — however, especially keep an eye on the 10-day ema & $100 level.
Go-To List
UPS — Not doing a chart yet. But watching daily and/or H4 moving averages and a potential retest of the B/O area near $220 for a buying opportunity. Great EPS reaction
Energy remains an absolute go-to.
AAPL — back on the go-to list. Amazing tag off the H4 10-day late Thursday
NVDA
ABBV
CVS hit new highs, again.
BRK.B
TD — Weekly-up at $80.45 flagged this week — beauty so far
V & MA — Digesting after great earnings reaction. 10-ema tag on the H4 could be in play.
BROS — H4-up would be attractive tomorrow.
Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.
Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!