Sunday Prep: An Election, Apple, the Chip Reports and a Jobs Number
Hey all. Clocks went back an hour this morning, so if your alarm felt generous, enjoy it. This week won't be. Apple and Palantir report Monday night, the country votes in the midterms on Tuesday, AMD reports Tuesday night, Qualcomm, Arm and AppLovin on Wednesday night, and the October jobs report lands Friday morning. And all of that arrives on the back of a Friday where QQQ fell 3.5% in one session.
So the plan is the same as always, just with more branches. Know where the events sit, know the few levels where the indexes change character, and have an if/then for every name you care about before the bell on Monday. I don't know how the election goes or what Apple says. I don't need to. I need to know what I'll do in each case.
Ok, let's get into it. Data runs through the Friday, Oct 30 close, charts are daily unless noted, and all times are Eastern.
The calendar first
Start here every week. I use the calendar to find the hours when the market is likely to be thin and jumpy, and the names that can gap 10% overnight, so I can size for it or stay out.
The Fed held at 3.75–4.00% on Oct 28, with two officials dissenting in favor of a hike, and two regional Fed presidents have since said more tightening is coming. Its quiet period is over, so expect Fed speakers this week; I couldn't find a confirmed schedule. One estimate for Friday (FactSet, via CNBC) is about 55,000 jobs added with unemployment at 4.2%, after 29,000 in September.
Look at where the weight sits. Tuesday night has the election results and AMD at the same time. Wednesday night has two chip reports and AppLovin. Friday has the jobs number with a Fed that's leaning toward a hike. Monday is the only day that doesn't have something big sitting on top of it, and even Monday ends with Apple. If you're holding something overnight this week, ask yourself which of those nights you're holding it through.
Where the indexes sit
Name the timeframe before you name the level. On the daily chart, SPY spent most of last week bouncing back toward its 20-day and 50-day, got within about a dollar of the prior week's high on Wednesday, and then gave the whole week back on Friday. It closed at 755.72, under both averages and well above the 200-day at 728.85. Friday's low, 750.36, sits right on top of the Sep 16 low (749.60) and the Aug 3 low (748.80). That's a shelf people can see.
Is QQQ in better shape? No. It's the reason SPY looks tired. QQQ is down 6.9% on the month, fell 3.5% on Friday alone and closed at 690.49, after trading as low as 683.45. The 200-day is at 679.52, about 1.6% below. That's one ordinary day away, in a week with four big tech reports.
The semiconductors are doing the damage. SMH is down 15% in a month and spent Friday sitting on its 200-day, after dipping under it during the day. Small caps (IWM) went the other way, up 1.3% on the week and closing just above their own 200-day. I wouldn't call that leadership yet, it's still under its 50-day. VXX, the volatility fund, is up 8% on the month. People are paying for insurance into a heavy week. That's sensible, not panic.
Where the money is going
Rank the eleven sector funds by how they've done over the last month. This is the fastest way I know to see what the market is actually rewarding, as opposed to what everyone on TV is talking about.
Here's the strange part. Nine of the eleven sectors beat SPY over the month, and eight of them are up more than 5%. Energy, staples and health care are each up more than 11%. And the index still fell. Why? Because the two that are down, technology and communication services, are down about 9% each, and they're the two biggest weights in the index. It's like a seesaw with two heavy kids on one end. Everyone else can stand up and it still tips.
What do I do with that? On the long side, I fish where the fish are, and this week the strong names come from energy and health care again. On the short side, I lean on the weak groups instead of fighting the strong ones. Communication services was the worst sector on the week too, down 5.3%. And I keep in mind that this kind of rotation can flip on one big report, which is exactly what Monday through Wednesday night are.
Earnings: which ones get a plan
Not every report deserves your attention. I care about the ones that move the indexes, and the ones that report into a level that matters. This week that's eight names. Look at the "vs 200-day" column. Qualcomm and Arm report from below their 200-day moving average, AppLovin is miles below it, and AMD is down 18% on the month. With SMH sitting on its own 200-day, Tuesday and Wednesday night decide a lot about whether the chips hold or break.
| Name | Reports | Close | vs 200-day | ATR | Last 60 days |
|---|---|---|---|---|---|
| AAPL | Mon after closeMon AMC | 344.63 | +16.2% | 6.70 | |
| PLTR | Mon after closeMon AMC | 184.11 | +19.9% | 9.20 | |
| SHOP | Tue before openTue BMO | 157.49 | +21.2% | 7.94 | |
| AMD | Tue after closeTue AMC | 504.80 | +23.0% | 32.19 | |
| UBER | Wed before openWed BMO | 65.25 | −11.0% | 1.70 | |
| QCOM | Wed after closeWed AMC | 164.79 | −2.8% | 7.47 | |
| ARM | Wed after closeWed AMC | 205.97 | −10.0% | 14.30 | |
| APP | Wed after closeWed AMC | 228.50 | −45.0% | 11.37 |
ATR is the average true range: how far the stock typically moves in a day, averaged over the last 14 sessions. A $32 ATR on AMD means a normal day is about a 6% swing before it even reports. Size for that.
My approach on these is boring on purpose. I don't hold a full position through the print. The morning after, I give it the first 15–30 minutes, then let the chart tell me. If it gaps up and holds above the gap, I'm interested in the first pullback that holds. If it gaps and fades back into the prior day's range, I leave it alone or look for the short. Same rule in reverse on a gap down.
Apple is the one I'd study first, because it's the one big tech name reporting this week that's still near its highs. It closed Friday at 344.63, about $7 under its 52-week high from Oct 23 (351.73), after dipping to 334.35 during Friday's selloff and recovering most of it. That's a stock reporting from strength.
The four lists
Every week I run the same four scans. Strong stocks for continuation. Oversold stocks for a bounce. Weak stocks for continuation lower. Overbought stocks for a reversion. Then I throw out most of what comes back. The scan finds candidates; the chart decides.
This week the scans ran on 455 US stocks over $10 that trade at least $150 million a day. Sixteen came back strong, two oversold, thirteen weak and four overbought. Below are two from each that I'd actually make a plan for, and why. None of them report this week. These are daily charts, for holds of a few days.
Strong, for continuation
Leaders in the groups that are leading.
Energy is the best sector on the month (+11.7%), and Exxon reported Friday morning and closed the day at 187.25, just under the new 52-week high it set that day (188.50). On a day QQQ lost 3.5%. That's what a leader looks like. The catch: it closed 2.7 ATRs above its 20-day, so it's stretched on the daily and I care a lot about how I get in.
Health care was the best sector on the week (+3.1%). Gilead reported Thursday after the close, opened Friday at 170.25, well above Thursday's close of 165.61, and ran to a new 52-week high at 175.65. Then it gave a chunk of that back and closed at 170.68, in the lower part of the day's range. Up 9% on the week and 3.4 ATRs above its 20-day. Do I chase it here? No. Do I want it? Yes, at a better price.
Also on the list: CVX, ABBV, V, TMO, KDP, HLT. AAPL screened strong too, but reports Monday after the close, so it lives in the earnings section. COP and PFE report this week, and AMGN, BP, DVN and PR may; check first.
Oversold, for a bounce
Uptrends that got hit hard and are heading for the 200-day.
Down 27% in a month, and 22% of that came in the last two days of the week, from Wednesday's close at 251.65 to Friday's at 196.40. Still above its 200-day at 183.19, and that's the whole idea: the long-term trend is intact, the short-term one is a mess. For sizing, look at the ATR. It's 18.76, nearly 10% of the price. A normal day is a big day here. Marvell hasn't announced its next report date; last quarter it reported in late August, so I don't expect it this week.
Reported Oct 28 after the close and opened Thursday at 127.95, down from 174.08. That's a 26% gap. Thursday's low, 127.40, landed almost exactly on the 200-day (128.38), and the stock closed near the day's high. Friday was an inside day, a range entirely inside Thursday's. So buyers defended a level everyone can see, and then nobody pushed. A bounce from here is a trade, not a repair. Gaps this size can take months to fill, if they ever do.
That's the whole list this week: two names, both from the parts of tech that got hit.
Weak, for continuation lower
Downtrends making new lows with no sign of a turn.
Communication services was the worst sector on the week, and Netflix is a big part of it. It made a new 52-week low on Thursday at 61.39, closed Friday at 62.08, and has spent three days in a tight box under every moving average it has. It's down about 47% from its 52-week high. Is it oversold? On the RSI, nearly. Do I want to buy it? No. Tight boxes at the lows tend to resolve in the direction of the trend.
Industrials are in the middle of the pack, so this one is about the stock, not the group. Boeing reported a wider loss than expected on Oct 27 and fell from 188.31 to 168.18 that day, then made a new 52-week low on Wednesday at 165.01. Thursday and Friday were a weak bounce that topped at 174.60. Every moving average is stacked overhead, 10-day under 20-day under 50-day under 200-day. ATR is 5.78, about 3.4% of the price, so give a stop room.
Also on the list: OKLO, APLD, RGTI, QBTS, IREN, BKNG, VALE, CDE, NLY. APP and UBER screened weak too, but both report Wednesday, so they live in the earnings section. QBTS and IREN may report this week; check first.
Overbought, for a reversion
Stretched far above the 20-day. Patience required.
Reported Oct 29 (revenue up 39% on the year, per its filing), gapped up from Wednesday's close to open at 1,332.73, and opened higher again Friday on the way to a new 52-week high at 1,449.68. Up 23% on the month, RSI near 78, 3.6 ATRs above its 20-day. And the ATR is 48, so a normal day is a $48 swing. Fresh reports like this can stay stretched a lot longer than a short can stay comfortable. So I wait for it to crack. Guessing the top is how shorts get run over.
Beat and raised on Oct 22, the second quarter in a row it raised guidance, and it's up 26% on the month. Friday is the candle I care about. It ran to 657.00 and closed at 636.95, right on the day's low. That's the first real sign of selling in this run. One candle isn't a top, but it gives me a line to lean on. It's 3.8 ATRs above its 20-day, and the stock is still under its 52-week high, so this isn't a blow-off at the top of a range.
Also on the list: DOW, SPGI.
Your turn
That's a lot of levels, and none of them are a reason to trade. They're places where I've decided in advance what I'll do. The work for you is the same work: pull up these charts yourself, decide where you'd be interested, decide where you'd be wrong, and decide how big you can be given the ATR. Then do one more thing this week. Write down which nights you're willing to hold through. Election night, three chip reports and a jobs number. If the answer is "none of them", that's a perfectly good answer.
Capital preservation is E V E R Y T H I N G. Have a great Sunday and I'll see you bright and early.
Cheers.
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How the lists were built
- Strong: price above the 20-day, the 20-day above the 50-day and the 50-day above the 200-day; within 3% of the 52-week high; 14-day RSI between 55 and 76. Ranked by three-month performance.
- Oversold: still above the 200-day; RSI under 35; at least 10% off the 20-day high.
- Weak: the strong stack upside down; within 5% of the 52-week low; RSI between 22 and 45.
- Overbought: RSI over 75 and at least 2.5 ATRs above the 20-day.
RSI (relative strength index) measures how stretched recent moves are on a 0–100 scale. Earnings dates for the featured names and the earnings table were checked against company announcements and news reports on Nov 1. Dates for the other names on the lists were not, so check before you trade them.