HAPPY SEMIQUINCENTENNIAL AMERICA
- KOREA
ES-
SUPPORTS= 7468(JULY LOWS)-7445-7420-7400
RES= 7509-7527-7547(21EMA)-7567(8EMA)
NQ-
SUPPORTS= 28693-29519-29408(JULY LOW)
RES= 28823-28929-29080
ASSUMPTIONS=
PIVOT 7509
LIS 7400 , BREAK OFFERS FLUSH TOWARDS 200DAY AROUND 7109 IN NEAR TERM IMO
SPY(FOR THE WEEK)-
SUPPORTS= 740.80-737.99-734.45-729.85
RES= 743.50-746.79(21EMA)-749.34(8EMA/THUR LOD)-754
QQQ(FOR THE WEEK)-
SUPPORTS= 692-686.45-682-FLUSH ENSUES IMO
RES= 696-702.61-707.81(21EMA)
MAGS: BAROMETER
JUST TO GAUGE SENTIMENT HERE, AS WE HAVE SEEN A PUSH HIGHER IN MAGS, THE MAG7 ETF FROM ROUNDHILL, OVER THE LAST MONTH WHILE MEMORY HAS SOLD OFF, I THOUGHT THIS WAS WORTH POSTING.
OVER THE LAST MONTH, MAGS RALLIED 13.78% WHILE DRAM EXPERIENCED ABOUT A 25% DRAWDOWN OVER THE SAME PERIOD.
THE MAG7 BOUNCE HAS HELPED KEEP THE NASDAQ FROM FALLING MUCH HARDER AS NAMES LIKE AAPL, AMZN, AND NVDA HAVE FOUGHT OFF THE SELLING AND POSSIBLE ROTATION BACK INTO THE "A-TEAM."
HOWEVER, THE RECENT SELL OFF HAS SENT MAGS BACK INTO THE DAILY EMAS. I WANT TO SEE THIS DEFEND THE 66 TO 65 AREA. IF THAT FAILS, IT OPENS THE DOOR FOR MAGS TO ROLL OVER, WHICH HAS BEEN A MAJOR FACTOR IN STABILIZING THE BROADER MARKET DURING THIS PULLBACK.
THE OTHER POSSIBILITY IS THAT MAGS CONTINUES LOWER TOWARD 63 WHILE MEMORY, VIA DRAM, STARTS TO BID BACK UP AFTER ITS RECENT SELL OFF.
THE ONE THING YOU DO NOT WANT TO SEE IS DRAM AND MAGS MOVING LOWER TOGETHER. THAT WOULD LEAD IMO TO A MUCH LARGER MARKET PULLBACK.
IBM:
AFTER THE PRE RELEASE OF THEIR NUMBERS, IBM HAD ITS WORST SESSION IN YEARS, SELLING OFF NEARLY 20% IN A SINGLE DAY. THAT WAS FOLLOWED BY FOUR DAYS OF CONSOLIDATION AROUND THE 214 LEVEL WE TRADED A FEW MONTHS AGO.
NOW THE DAILY CHART HAS A DECISION TO MAKE IMO AS PRICE CONTINUES TO PING PONG BETWEEN 200 AND 214.
I AM LOOKING TO TRADE OFF 214 INTO THE START OF THE WEEK. IF THAT LEVEL REJECTS AGAIN AND PRICE BREAKS BELOW 200, THE 200P COULD BE IN PLAY IMO. A BREAK OF THIS LWL SIGNALS TO ME THAT A LARGER MOVE LOWER COULD FOLLOW, WITH 200 BEING THE LAST MAJOR AREA FOR BUYERS TO DEFEND.
HOWEVER, IF 200 HOLDS OR 214 IS RECLAIMED, THERE IS ROOM BACK UP TO THE TOP OF THE WEDGE NEAR 229, WITH A LARGE GAP STILL SITTING ABOVE. IF THAT SCENARIO PLAYS OUT, I COULD SEE A PUSH BACK INTO THIS MONTHLY ZONE TOWARD 230 VIA THE 230C.
IMO A REJECTION OF 214 WOULD OFFER THE BETTER TRADE FOR CONTINUATION LOWER, BUT WE WILL SEE. NOTE IT DOES HAVE ER THIS WEEK BECAUSE THEY WERE PRERELEASED.
PLTR:
PLTR HAS CONTINUED TO HOLD UP WELL OVER THE LAST FEW SESSIONS WHILE A BULK OF THE TECH NAMES HAVE BEEN HAMMERED LOWER. WE TRADED THIS WELL THIS WEEK, AND AS I MENTIONED, IT IS NOT ONLY A WAR STOCK BUT ALSO A LARGE WEIGHTING IN IGV, THE SAAS ETF.
IGV CONTINUES TO LOOK STRONG ON THE DAILY. IF CHIPS CONTINUE TO COME DOWN, THE THEME HAS BEEN A ROTATION INTO SOFTWARE. PLTR FITS BOTH OF THOSE THEMES AS IT IS BOTH A SAAS NAME AND A DEFENSIVE NAME.
IF PLTR HOLDS THE 128 TO 130 ZONE, I THINK A PUSH INTO LWH AND 142.5 IS IN PLAY. THE 140C ARE ONCE AGAIN MY GO TO HERE IF IT DEFENDS THURSDAY'S LOD IMO.
OXY:
THE DAILY CHART HELD THE 50 LEVEL, AND THIS WEDGE IS STARTING TO PUSH AFTER CLOSING ABOVE IT ON FRIDAY FOLLOWING A SUCCESSFUL BACKTEST.
A BREAK ABOVE 55 SHOULD OPEN THE DOOR FOR A MOVE TOWARD THE 56.40 TO 59 AREA IMO, ESPECIALLY IF THE WAR PERSISTS, WHICH SEEMS LIKELY IMO.
THIS IS DEFINITELY WORTH WATCHING. I THINK IT COULD GAP UP OVERNIGHT, WHICH MAKES THE ENTRY A LITTLE MORE DIFFICULT, BUT IT REMAINS A MUST WATCH IMO.
NOTE=
THE WEEK AHEAD: EARNINGS SEASON IN FULL SWING
A MASSIVE WEEK IN THE MARKETS IS COMING UP AS EARNINGS SEASON KICKS INTO FULL SWING STARTING TUESDAY, BUT THE BIG DAY WILL BE WEDNESDAY AS GOOGL, TSLA, AND NOW ALL REPORT. THIS MARKET HAS BEEN A TOUGH BEAST TO SLAY ALL YEAR. THE THESIS WAS A RUN UP INTO JULY 4TH FOR AMERICAS 250TH BIRTHDAY AND AFTER THAT ANYTHING GOES. IT SEEMS LIKE NOW WE ARE ON THE CUSP OF A DO OR DIE SCENARIO.
WE SLIPPED THE DAILY EMAS ON THE INDICES AND THEN REJECTED THE BACK TEST ON FRIDAY. IF NOT RECLAIMED NOW, THAT COULD DRAW A CHANGE OF TREND FROM UPTREND TO SHORT TERM DOWNTREND BASED PURELY ON ACTIVE SEQUENCE THEORY. THE ISSUE IS THAT ANYTIME WE HAVE SLIPPED BELOW THE EMAS THIS YEAR WE HAVE SUBSEQUENTLY SEEN A SNAP BACK RALLY THAT CAUGHT BEARS OFFSIDES. HOWEVER, ALL OF THAT CAME AHEAD OF AMERICAS 250TH BIRTHDAY. NOW WE ARE PAST IT.
THIS WEEK IS ALL ABOUT EARNINGS AND MEMORY. GOOGL IS PROBABLY DOING FINE ON THE NUMBERS, BUT THE GEMINI DELAY TOOK IT DOWN HARD THIS WEEK AND WILL BE DISCUSSED ON THE CALL. TSLA NUMBERS ARE PROBABLY WEAK ONCE AGAIN, BUT CHINA SALES CAME IN BETTER THAN EXPECTED. THE NOW PRINT WILL BE THE GUIDE FOR THE SAAS SECTOR AND WHAT THAT LANDSCAPE LOOKS LIKE. A LOT OF EARNINGS AT A MASSIVE ZONE = INFLECTION POINT IMO.
THE DIVERGENCE NOBODY CAN GRASP
NQ IS FALLING OFF A CLIFF WHILE YM AND ES ARE STILL HANGING ON. A MAJORITY OF THAT IS NOT DUE TO THE WAR IN IRAN. IT IS THE ROTATION OUT OF MEMORY DURING THESE SELLS, WHICH HAS HURT THE AI TRADE THAT BROUGHT US UP. PEOPLE HAVE FLOCKED TO SAFETY AND PUSHED CYCLICALS AND DEFENSIVES HIGHER, WHICH HAS ALLOWED YM AND ES TO FIGHT OFF THIS SELL. IM UNSURE HOW LONG THAT CAN CONTINUE. MAGS HAS TRIED TO SAVE THE MARKETS OVER THE LAST MONTH, PUSHING UP 13%, BUT ON FRIDAY IT RETREATED. YOU NEED MAGS AND MEMORY TO GO THE SAME WAY SOON OR THE DIVERGENCE WILL DISSIPATE AND THE SELL WILL SPREAD OUT.
ONE OTHER THING TO NOTE HERE. EVERYONE IS SO CONFUSED HOW MEMORY NAMES AND THE BASKET ARE DOWN SO MUCH, BUT THEY FORGET HOW MUCH NAMES LIKE MU, SNDK, WDC, AAOI, LITE AND OTHERS RALLIED OVER THE LAST 12 MONTHS. EVEN AFTER THESE SELLS THEY ARE UP 400 TO 700% ACROSS THE BOARD. PEOPLE TALK ABOUT MOMENTUM NAMES AND HOW GREAT THEY ARE UNTIL THE MOMENTUM IS LOST AND THE NAMES RETREAT. NAMES THAT CAN FLY HUNDREDS OF PERCENT CAN ALSO HAVE SHARP RETRACES, AS WE HAVE SEEN THE LAST FEW WEEKS. HIGH BETA NAMES ARE HIGH BETA FOR A REASON. IF YOUR PORTS ARE GETTING CRUSHED BECAUSE YOU RODE THE MEMORY TRADE UP ALL YEAR, ID BE WILLING TO GUESS YOU ARE STILL OUTPERFORMING THE S&P BUT SITTING IN A STEEP DRAWDOWN.
I HAVE SAID IT AND WILL SAY IT AGAIN. I THINK MEMORY HAS ONE MORE FLUSH IN IT BEFORE A SNAP BACK OCCURS, DEPENDING ON EARNINGS. BUT NAMES SITTING 30 TO 50% OFF HIGHS WITH NO FUNDAMENTAL CHANGE IS WHERE MOMENTUM TRADERS HAVE TO MAKE DECISIONS, AND IMO THIS BLOW UP IN THE KOSPI HAS DONE MORE DAMAGE TO MARKETS THAN OIL AND IRAN HAVE. FEAR WILL LIKELY BE BOUGHT IF WE GET A CAPITULATION DAY ON MEMORY IMO.
THE PAIR TRADE: IGV VS SMH
NOTE IGV HANGING IN THERE AND STILL LOOKING GOOD. THIS IS BAD FOR CHIPS, AS THE PAIR TRADE ALL YEAR HAS BEEN CHIPS UP, SAAS DOWN. IGV VS SMH HAS BEEN THE PAIR, AND WITH IGV HOLDING UP WHILE SAAS NAMES TAKE THE BEATING, IF FUNDS WANT TO FIND A RISK REWARD PROFILE ON SOME DECENT NAMES, ID EXPECT THEM TO TARGET SOFTWARE. GIVEN THE YEAR WE HAVE HAD, THAT WOULD MEAN CHIPS PULL BACK. I THINK AT SOME POINT IN THE NEXT FEW WEEKS OR MONTHS SAAS AND CHIPS MOVE IN THE SAME DIRECTION, AND THAT IS WHEN MARKETS CAN ROTATE HIGHER.
THE MACRO OVERLAY
AS OF NOW MARKETS HAVE NOT BEEN ABLE TO PIERCE THROUGH 7600 OR ATH, AND MEMORY HAS FADED, CAUSING A TECH SELL OFF NOT SHOWN IN THE DOW OR ES. THIS HAS PULLED THE INDICES LOWER, AND IF NOTHING CHANGES SOON WITH THE AUCTION UNFINISHED, A FLUSH LIKELY ENSUES BEFORE TRUMP STEPS IN IMO. AS MENTIONED, THIS WAR IS OUT OF HIS CONTROL. IRAN WANTS THE CHAOS BECAUSE THEY KNOW HIS PRECIOUS STOCK MARKET MEANS MORE TO HIM THAN THE WAR DOES. HE HAS NO CONTROL OVER WHEN THIS ENDS, BUT WITH SERVICE MEMBERS TRAGICALLY KILLED THIS WEEKEND, ID ASSUME A HARSH RESPONSE IS COMING, WHICH WILL DRAG THIS ON.
LEVELS: THE LINES IN THE SAND
FOR THE INDICES, YOU NEED NQ TO HOLD THE "U" CONTRACT ROLL LOWS NEAR 28518 TO 28408 AND HOPE KOSPI BOUNCES, OTHERWISE A 400 TO 500 POINT SELL COMES FAST. ON ES YOU NEED 7400 TO REMAIN STRONG. THAT IS THE LINE IN THE SAND TO PREVENT A SELL INTO 7109 AND THE 200 DAY IMO.
IN SHORT
ES INTO THIS WEEK NEEDS TO RECLAIM 7509 FOR A PUSH BACK INTO THE EMAS NEAR 7550, WHICH OPENS THE DOOR BACK TO THE TOP OF THE RANGE AT THE 7630S. IF 7509 OR 7550 IS NOT RECLAIMED, THIS WEEK LIKELY DRAWS INTO 7445 TO 7400, WHICH MUST HOLD OR THIS SELL SPREADS AS BREADTH WEAKENS FOR A PUSH DOWN INTO 7109 IMO. 7400 IS MY LINE IN THE SAND TO HOLD BEFORE A SNAP OCCURS AND SELLS SPREAD. 7509 IS THE SPOT TO PUSH ABOVE AND MY PIVOT FOR ANY TYPE OF SNAP BACK ACTION HERE IMO