AAPL, AMZN, AMD Are in Focus This Week
S&P tries to rebound from Thursday’s bearish reversal
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Our View
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 reported on Thursday evening.
Our Lean
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:
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The market remains in an uptrend, and that’s why even with Thursday’s nasty reaction, I 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.
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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?
Our Lean: I think we have the potential for some two-way flow today. If thin-to-win comes into play, the bias is to the upside. Watch 4610-16. Above that puts the next 10 points in play on the upside and possibly all the way up to 4634+
On the downside, 4590 is notable support. Below that I have 4585, 4577 and 4567 as my next levels.
MiM and Daily Recap
The ES traded down to 4558 and up to 4598 on Globex before opening Friday’s regular session at 4596.75. After the open, the ES popped to 4599.50 and dropped down to 4589.75 in the first ten minutes, then turned higher, rallying to 4607.25. From there, it fell ~10 handles to 4597.75, which set up the rally to the session high as the ES rallied to 4616.50 at 11:40. The ES fell 9 points to 4607.25, popped to a lower high of 4615 at 12:25, then rolled over and fell 26.25 points down to 4588.75 at 1:40.
After the low, the ES rebounded all the way back to 4612 — another lower high — then slowly sank down to 4603 as the 3:50 cash imbalance showed $300 million for sale. The ES dipped to 4601, popped to 4610 and traded 4606.75 on the 4:00 close. After 4:00, the ES traded sideways and settled at the 4607 on the 5:00 futures close, up 42 points or 0.93%.
In the end, the ES made up a bulk of Thursday’s losses overnight and held up on Friday despite the early high. In terms of the ES’s overall tone, it was strong overnight and firm during the day session. In terms of the ES’s overall trade, volume was steady at 1.49 million contracts.
Technical Edge
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NYSE Breadth: 74% Upside Volume
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Advance/Decline: 71% Advance
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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’ help the equity markets, but those yields fading below 10% 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 be Friday’s high too (approximately).
SPY Daily
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Pivot: $456.50
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Upside Levels: $457.50, $459.40, $460.35+
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Downside Levels: $455, $453, $451.50
S&P 500 — ES Futures
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.
SPX 15-min
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Upside Levels: 4590, 4605-10, 4625-30
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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.
ES 15-min chart (*regular hours session, no Globex)
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Pivot: 4616.50
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Upside Levels: 4625, 4634, 4646-50
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Downside levels: 4590, 4577, 4567
NQ
The NQ has traded pretty clearly over the last week or so. Note the double-high from Thursday/Friday near 15,910. If we push through these highs, then 15,940, there’s not much in the way to stop a run back to 16,000+
On the downside, a break of 15,800 could thrust the 15,715-25 zone into play.
NQ 1-hour
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Upside Levels: 15,905-15, 15,940, 16,000, 16,030-40
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Downside levels: 15,800, 15,715-25, 15,660
QQQ
QQQ Daily
1.80% rip on Friday, now trying to open near the two-day high of ~$384.50. A push over $385 fires up the bull engine and puts the $388 highs in play.
If we fade, $380 is key on the downside, then $374.50 to $376.50.
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 break-even (B/E) or better stops.
** = previously mentioned trade setup we are stalking.
Down to Runners in GE, CAH, LLY, ABBV, AAPL, MCD & BRK.B. Now Add META, AVGO, UBER, CRM, AMZN, CVS, AMD, TLT and YM.
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DOCN — Long from $38.25 — Small trim at $39.75 to $40 and a second trim above $40.75. Trimmed more between $45 and $47 and down to ⅓ at $49.50+
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Should have us down to a ⅓ position. I think we may be able to get $53+ out of this.
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JPM — Retested the breakout zone and long. This is a longer term swing. Many are long from $143-145. Trimmed $153s, then $157.50+ on 7/24.
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Down to ½ position vs. Break-even stop. Can make small, ~10% position trim if we see $160+
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ARKK — Long from ~$46 — trimmed near/at $50. Still carrying ⅔ to ¾ of position. Trim at ~$52
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Adding back what we trimmed if we see $45 to $46
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HSY — Longer-term swing. Want to see this one hold $236-37. “Minor” ~⅕ trim was at $237.50 to $239. Earnings on tap 7/27
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Broke $236-$237 after our first minor trim. w
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WMT — went weekly-up from this week’s play — Trimmed above $157.55 and then $158. Down to ½ position with trim at $160+
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Break-even stop, down to ¼ position or less at $162.50
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Look for reset trade back down to ~$158!
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CRM — I’m long CRM from $227.50. I’m using the initial $222 to $222.50 stop-loss. Bulls did get a chance to trim north of $230 if they took it. We’ll see what today brings. ¼ trim on any push over Thursday’s HOD. Trim more over $232.50.
Go-To Watchlist
Feel free to build your own trades off these relative strength leaders
Relative strength leaders →
(Lack of updates here but these names remain my top focus list!)
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Growth stocks ARKK — DKNG, DOCN, UPST, SHOP
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LLY, CAH
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AI stocks — NVDA, AMD, AVGO, ADBE, SMCI
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Mega cap tech — MSFT, AAPL, META, CRM
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Select retail — CMG, ELF, LULU, COST
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Homebuilders ITB — TOL, KBH, DHI
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BRK.B
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ABEV, DXCM
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Cruise stocks — RCL, CCL, NCLH
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DAL, DT, AMAT
Relative weakness leaders →
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DIS → new 52-week lows
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CF, MOS
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PFE (all vaccine gains now gone)
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EL, FL, DG
Economic Calendar
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!
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