NAS/QQQ Weekend Levels ( July 18-22)
Here is a look at the Nasdaq going into the week of July 18th - 22nd. Price broke out and re-tested of the falling wedge pattern last week. There is a good chance for a move higher into the 55 ema. A failure to break the 55 ema may lead to a retest of the June low. Targets above are the 55 ema, 382 Fib & 618 Fib. Earning season has begun. Below are a few key points I am looking at.
• Coming off volatile week where the Nasdaq dropped 600+ points and recovered 450 points to finish
• Last week’s CPI reading of 9.1% was very high but seen as by many as peak inflation
• Weakening inflation data globally has many thinking the Fed may soften their hawkish stance
• 2 Fed heads stated last week that a 1% rate high in July was not on the table
• Max pessimism sets up the market for a massive short squeeze
• Outlier shock risks still exist… read … Taiwan or complete energy cutoff to Europe by Russia
• Earnings heat up this week with reports from more big banks, energy companies & heavily followed stocks like NFLX & TSLA
• Yields are dropping but also inverting suggesting recession
• Recession worries can be bullish as the Feb may have to stop tightening.
• Nasdaq forming basing pattern and setting up for possible break of the 55ema
• A failure at the 55 ema could lead to a re-test of the June low.
• USD has been very strong. Any reversal in the USD could cause a rally in commodities.
EVENTS WEEKLY
Monday Nothing Notable
Tuesday US Housing Starts, EURO CPI, Crude data
Wednesday Canadian CPI, US Existing Home Sales & EIA Crude Oil Inventories
Thursday ECB Rate decision, US Jobless Claims
Friday US PMI Flash, Baker Hughs Rig Count
NOTABLE EARNINGS
Monday BAC, SCHW, GS, IBM
Tuesday ALLY, HAL, JNJ, LMT, NVS, SI,NFLX,
Wednesday ABT, BKR, BIIB, AA, CSX, KMI, LVS, TSLA, UAL
Thursday AAL, T, BX, DHI, DPZ, DOW, NUE, PM , DGX, ISRG, SNAP, STX, MAT
Friday AXP, CLF, SLB, TWTR, VZ
BULLISH NOTES
Basing pattern forming
Max negative sentiment = potential short squeeze
Recession fears may soften Fed tone
Nasdaq above 9/21 ema cloud
Potential positive earnings momentum
BEARISH NOTES
Fed is tightening into a weakening economy
Max neg. sentiment may lead to self fulfilling prophecy
Possible negative earnings momentum
Earnings estimates likely to be revised lower
Possible Earning recession
Outlier event shock risk is high
• Coming off volatile week where the Nasdaq dropped 600+ points and recovered 450 points to finish
• Last week’s CPI reading of 9.1% was very high but seen as by many as peak inflation
• Weakening inflation data globally has many thinking the Fed may soften their hawkish stance
• 2 Fed heads stated last week that a 1% rate high in July was not on the table
• Max pessimism sets up the market for a massive short squeeze
• Outlier shock risks still exist… read … Taiwan or complete energy cutoff to Europe by Russia
• Earnings heat up this week with reports from more big banks, energy companies & heavily followed stocks like NFLX & TSLA
• Yields are dropping but also inverting suggesting recession
• Recession worries can be bullish as the Feb may have to stop tightening.
• Nasdaq forming basing pattern and setting up for possible break of the 55ema
• A failure at the 55 ema could lead to a re-test of the June low.
• USD has been very strong. Any reversal in the USD could cause a rally in commodities.
EVENTS WEEKLY
Monday Nothing Notable
Tuesday US Housing Starts, EURO CPI, Crude data
Wednesday Canadian CPI, US Existing Home Sales & EIA Crude Oil Inventories
Thursday ECB Rate decision, US Jobless Claims
Friday US PMI Flash, Baker Hughs Rig Count
NOTABLE EARNINGS
Monday BAC, SCHW, GS, IBM
Tuesday ALLY, HAL, JNJ, LMT, NVS, SI,NFLX,
Wednesday ABT, BKR, BIIB, AA, CSX, KMI, LVS, TSLA, UAL
Thursday AAL, T, BX, DHI, DPZ, DOW, NUE, PM , DGX, ISRG, SNAP, STX, MAT
Friday AXP, CLF, SLB, TWTR, VZ
BULLISH NOTES
Basing pattern forming
Max negative sentiment = potential short squeeze
Recession fears may soften Fed tone
Nasdaq above 9/21 ema cloud
Potential positive earnings momentum
BEARISH NOTES
Fed is tightening into a weakening economy
Max neg. sentiment may lead to self fulfilling prophecy
Possible negative earnings momentum
Earnings estimates likely to be revised lower
Possible Earning recession
Outlier event shock risk is high
Comment:
Here is the 4H look on Mon morning of the basing pattern I mentioned above. Forming an ascending triangle with breakout point at the 55 ema. Always the chance it pulls back into the 21 ema again.
Comment:
Prices reversed sharply today on negative AAPL news forcing me to close some longs I had going. The ascending triangle is now more of a symmetrical triangle giving the NAS less of a bullish basing pattern and more of a bearish look. Lower trendline will be a key area to watch.
Comment:
Positive reversal this morning. Yesterday's pullback found support at the 21 ema which is bullish. Tells us that buyers were waiting. Making another run toward the 55ema. Must break above the 55 ema for bullish continuation.
Comment:
Price broke out of the symmetrical triangle and the 55 ema was hit. The 55 is now the key resistance above. Note that 1.13 fib X is my breakout failure point. If price cannot get above the 1.13 fib look for price to fall back down.
Comment:
Here is a look at the NAS on the daily. Above the 55 ema but stuck at 1.272 fib x resistance as well as the 382 fib RT (measured from the Mar 29th high). If it breaks through looking for a move into the higher time frame 382 fib RT that comes in at 12879.
