Broader Market
$ES / $SPY
Everything still looking healthy heading into August. Support for me will be the 20d/monthly pivot 4350ish area, followed by the 50d/annual pivot 4275ish area. 4500 is the first area I see as possible resistance.
Let the monthly chart keep you objective about where we are in the bigger picture. Things can’t go straight up forever. Don’t think for a second that the S&P can somehow skirt the rules of physics. As long as the fed keeps printing money the music will keep playing. But once the music stops, we need to know how to spot the trouble. That is why I use higher timeframes to see when things start to change. You can see I have set an alert for the break of July’s lows. That doesn’t mean things are broken, but it’s definitely something to take note of if/when that happens. The other thing I watch for is lower highs and lower lows on the weekly chart.
$NQ / $QQQ
Still would like to see a retest of that 14000 level.
Weekly chart shows just how beautiful that level would actually be. If we get that pullback, I would be very interested in looking for strong tech stocks holding nice levels of support for possible longs. Till then I won’t be thinking too much about starting any new long swings. But I will still take day trades on both the long and the short side. Monthly pivot up around 15300 is the first area of resistance.
$BTC
Well, she’s trying to break north of her base. Nothing has happened convincingly yet, but that can change at any moment. First level of resistance will be the shove into the underside of that weekly 20sma. That very well could smack it right back down into the sideways channel. If instead holds the old resistance as support, it may be gearing up for a bigger move higher.
Sector Strength/Weakness
Notice how Materials and Utilities have been gaining strength. That is sometimes early signs of a bull market getting weak. It is not the be-all-end-all, but it’s always something that I pay attention to.
This is a handy chart to have and understand.
LONG SETUPS
Strong Stocks Looking For Continuation
$XM
Love how this name has created a big curling look off the lows and is starting to show signs of strength. Would look for any pullback to that 40 level to show support and get long. If that area doesn’t hold and we somehow make our way down towards the 20d, I would be VERY interested in the name and may even throw some in my longer term account. But remember, for starting new swings would first prefer the broader market to pullback to better levels of support. If the Nasdaq goes and retests that 14000 level, this would be a go-to name for me.
$AMD
Can’t argue with those big green candles and the volume to boot! Thinking if we get any retest of the breakout area/pyschological 100 level, it’s going to provide a great area for a high probability long.
Oversold Reversion Setups
$PYPL
Umm, hello you fine fine lady. So far pulled right back into levels mentioned last week in the Prep. Hoping we can actually get down a little bit closer to 266ish, but if this is all she wants to pullback then I have no problem watching for higher lows intraday and try to join trend.
$W
Thinking any further panic flush down into the 223 area is a great spot to take a shot at this long.
Monthly chart agrees with me.
$LVS
Thinking if this can speed up down towards 37 level I would be a buyer for a bounce. Keep in mind, this is weak due to looming lockdown possibilities from Covid resurgence.
SHORT SETUPS
Weak Stocks Looking For Continuation
$ARKK
This name is really struggling to reclaim the 200d and now has the 20d about to cross underneath the 200d. Not to mention that this etf is compiled of a TON of names that individually would fit perfectly on this section of the Sunday Prep. Will be watching this week to see if it stuffs the 200d and then will be looking for lower highs to join trend. If it just flushes off the open Monday and loses the 50d, I may look to get involved lower. If it loses lasts week’s lows it’s in trouble.
Overbought Reversion Setups
$BX
This name isn’t there yet, but if it were to continue extending there may eventually be a setup here. Remember, for these setups I need to see things get extreme. This very well may give a reversal from here back towards the 20d, but there’s just no way to put a trade on with the kind of conviction that I could if I saw things get silly extreme. So for now just monitoring.
EARNINGS
Here’s this week’s lineup. Should be a doozy.
$TTWO
You guys may remember this from last week’s prep as one of the short ideas. With them reporting numbers this week, there are actually setups for both longs and shorts, depending on what the market’s reaction is to the report. If they gap down big, that 139-140 area is SUPER juicy. I highly doubt it gets that low just off the earnings reaction and would be prepared to scoop emotional flushes off the psychological 150 level.
If they gap it up off the numbers, I would most likely be prepared to fade an emotional spike into that 187-190 area. Next area higher for the short is the psychological 200 level.
$BABA
With the looming fear of what might happen next in the Chinese names, I really think that any pop off the earnings will be treated as an opportunity for people to exit their longs with as minimal damage as possible. Think a spike into the 205 area offers high probability of resistance. If they were to gap it higher, the next level of interest for me is 212-213. If they gap down on the numbers, I would probably just look to see if it can push back up to levels of resistance to fade. I highly doubt I try to long this name with all the fear in the name.
$SKLZ
Still think a pop into the 17-18 area offers a great fade opp.
$LYFT
Depending on the market’s reaction to the numbers, my levels will vary. For the fade I like either the 64 area or the 68-69 area. For scoops I would look for 48 first. Below that I would entertain 45 and then 40. Let’s see where the market takes it after the numbers come out.
$CVS
Like the 76-77 area for scoops if it can somehow get down there. A spike up into 52w highs and I would entertain the short.
$ROKU
Almost didn’t include this name in the prep due to my inability to look at this thing without pontificating on how overvalued I personally think this thing is. But it trades good volume with crazy range, so it would be selfish to leave it off the list. Would be interested in shorting any large emotional spike up towards the psychological 500 level. But remember when trading something that has a 22pt ATR to size appropriately and give yourself enough room to not get shaken out of the trade until you’re legitimately wrong in your thesis. There are probably great areas to try and bounce the name if they miss and flush in a panic, but I would rather short pops afterwards if that happens.
$UBER
I really like the 40-41 area for scoops if they get hit on the numbers. Monthly 20sma is right in that area as well. If they spike up into the psych 50 level I would probably be looking for spots to get involved short.
$ETSY
Notice how this name lost its longer term trendline and has really struggled to reclaim it as it retests it from the underside. If they miss on numbers I would possibly try to scoop around 155 for a bounce, but if it lost the 153.8 level, I would be getting pretty short biased on the name. Would also entertain a fade on a big spike into the 207 area. A lot of this is going to hinge on where the name is trading when numbers come out tho. They don’t report till after the close on Wednesday and it very well could move up towards that 200 level prior to their earnings report. If that happens, the short area for me wouldn’t be till much higher, most likely up around 221.
$FSLY
Flush towards 41 and I would possibly put on a long for a bounce play. If it were to gap down under that level, 35 is my next spot, which I actually like wayyyy more than 41. A spike towards 56.5-58 would be where I would take my shot at the fade.
$WDC
Flush to 57 for the long or a spike to 71 for the fade.
$WYNN
A flush down to 87-88 for scoops or a spike to 108-109 for the fade.
$SQ
Very similar chart to ETSY, and very similar thoughts as well. A flush toward 193 and I would be interested in the long, but if it lost 191.36 I would be very bearish on the name. After that I would only look to short pops. If it spikes off the numbers towards 52w highs I would possibly entertain the short.
So many more names reporting that I will be watching such as $CRSR, $NKLA, $UAA, $COP, $BGFV, $NET, $BYND, $CRON, and $AMC. But if you want to be successful in this business, you will need to learn to analyze for yourself. So make those names your personal homework. I have already made my own plans for all of them. Hope you all enjoyed your weekend and I will see you all bright and early Monday morning to #FSU!!! Cheers
