Here is the weekend look at the ES/SPY going into the trading week of Jan 31 - Feb 4. Fed week did not disappoint in terms of volatility. ES like the NQ made a massive round trip turn to open the week. Trading down 170 points (4%) only to reverse and close the day 13 pts in the green. The rest of the week price revisited the Oct low 3 more times and then wrapped up the week on Friday with a strong bounce into the red neutral box and the 200 day MA.
The late week bounce was promising for the bulls but price will have to clear the 200 MA and the bottom of the red neutral at about 4435 to move higher. At this point I will remain bearish until price can get above the top of the red neutral box at about 4575 as the statistical path of least resistance doesn't flip bullish until price reaches that point again. That said the S&P is the strongest index and positive price moves in the Megacap stocks such and AAPL, MSFT and GOOGL (post earnings) would really give the ES a push. If price sells off again look to the recent pivot low at 4212 as first support. Below that the 4000 level would be in play.
As previously mentioned in the NAS post... We are coming into the heart of earnings season so expect more volatility. The market will get new insights into how companies are dealing with inflation pressures and supply constraints. Non Farm payroll on Friday and CPI data due later this month will keep the market on edge.
I have been posting very few swing charts lately. The reason for this is that under the current conditions trades should be kept small an short. Personally all my trade recently have been short term Futures trades using the levels I provide weekly in these posts. Almost every line on my charts can be used for quick scalps in either direction. If you do not trade futures or the SPY I recommend focusing on one or two liquid stocks that you are familiar with and use my weekly posts to gauge sentiment and trend.
If you find my posts helpful please give me a thumbs up. I am averaging less than 10 likes a week which is kinda lame. Comments are encouraged as it gives me an idea whether or not followers are finding these posts useful or confusing.
Weekly events...
Monday... Last trading day of January. Chicago PMI
Tuesday... 1st trading day of Feb, US ISM data, JOLTS, OPEC meeting, earning from GOOGL,GM,AMD,PYPL,SBUX,UPS
Wednesday... OIL inventories, ADP employment, earnings from highly followed Dividend stocks + FB
Thursday... Jobless claims, US Factory orders, ISM data, earnings from AMZN, F, BABA, PINS, SNAP, U + Div stocks
Friday... Non Farm payrolls, US unemployment earnings from BMY,GOOS,ETN REGN, RCL
Bullish notes...
Solid late week recovery above 14367
Positive earnings become bullish catalyst.
Beginning of Feb inflows possible
Oversold relief rally possible
Negative sentiment can be a contrarian indicator.
Bearish notes...
Price below neutral, 200sma & the 9/21 emas
Market breadth still weak
Data risk from ISM & Non Farm payrolls
Key earnings come in weaker than expected
Russia/Ukraine tensions.
10 year yield potentially breaks 2%
Valuations still still relatively high
Return to Pre Covid trend still not complete.
The late week bounce was promising for the bulls but price will have to clear the 200 MA and the bottom of the red neutral at about 4435 to move higher. At this point I will remain bearish until price can get above the top of the red neutral box at about 4575 as the statistical path of least resistance doesn't flip bullish until price reaches that point again. That said the S&P is the strongest index and positive price moves in the Megacap stocks such and AAPL, MSFT and GOOGL (post earnings) would really give the ES a push. If price sells off again look to the recent pivot low at 4212 as first support. Below that the 4000 level would be in play.
As previously mentioned in the NAS post... We are coming into the heart of earnings season so expect more volatility. The market will get new insights into how companies are dealing with inflation pressures and supply constraints. Non Farm payroll on Friday and CPI data due later this month will keep the market on edge.
I have been posting very few swing charts lately. The reason for this is that under the current conditions trades should be kept small an short. Personally all my trade recently have been short term Futures trades using the levels I provide weekly in these posts. Almost every line on my charts can be used for quick scalps in either direction. If you do not trade futures or the SPY I recommend focusing on one or two liquid stocks that you are familiar with and use my weekly posts to gauge sentiment and trend.
If you find my posts helpful please give me a thumbs up. I am averaging less than 10 likes a week which is kinda lame. Comments are encouraged as it gives me an idea whether or not followers are finding these posts useful or confusing.
Weekly events...
Monday... Last trading day of January. Chicago PMI
Tuesday... 1st trading day of Feb, US ISM data, JOLTS, OPEC meeting, earning from GOOGL,GM,AMD,PYPL,SBUX,UPS
Wednesday... OIL inventories, ADP employment, earnings from highly followed Dividend stocks + FB
Thursday... Jobless claims, US Factory orders, ISM data, earnings from AMZN, F, BABA, PINS, SNAP, U + Div stocks
Friday... Non Farm payrolls, US unemployment earnings from BMY,GOOS,ETN REGN, RCL
Bullish notes...
Solid late week recovery above 14367
Positive earnings become bullish catalyst.
Beginning of Feb inflows possible
Oversold relief rally possible
Negative sentiment can be a contrarian indicator.
Bearish notes...
Price below neutral, 200sma & the 9/21 emas
Market breadth still weak
Data risk from ISM & Non Farm payrolls
Key earnings come in weaker than expected
Russia/Ukraine tensions.
10 year yield potentially breaks 2%
Valuations still still relatively high
Return to Pre Covid trend still not complete.
Comment:
Price has broken through bottom of the neutral box and is now above the 200 MA. Look for a move back up to the 21 ema and top of neutral box. Bias is still bearish so be cautious with longs as sellers can return at any time.
Comment:
Wild week so far. Started the week just above the 200 and at the bottom of the red neutral box. Moved all the way to the top of the neutral and then back down. Now retesting the 200 sma. The NAS has fallen below the 200 SMA. Hopeful the ES can hold it. Strong jobs number has spiked the 10 year yield so this is spooking the market. Need to wait for the cash open to see how things play out, but looking bearish so far.
