ES/SPY Weekend Levesl (July 18 -22)
The S&P is still trading within the downward wedge. Although it is forming a basing pattern it still must break through the upper trendline for continued bullish momentum. A failure at the trendline my lead to a re-test of the June low. On a break higher the first target is the 55 ema followed by the 382 Fib. Earnings season has begun and may provide a catalyst. Below are a few key notes for the week ahead.
• Coming off volatile week where the S&P dropped 160+ points and recovered 125 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 S&P dropped 160+ points and recovered 125 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:
1H look on Monday morning. Price has pushed right up to the top trendline. Must break through b/f bullish continuation. May see a pull back first.
Comment:
Complete rejection off the upper trendline today. 3700 area will be key to the downside. Market is showing us that it is very quick to take profits and jump on shorts. Bias will remain bearish until the upper trendline is broken.
Comment:
Back at the upper trendline and above the key 3900 level. On a break above the trendline look for a move into the 55 ema. Must get above the 55 ema for bullish trend continuation.
Comment:
Nice run up so far, but stuck at 55 ema resistance. Good possibility that price pulls back to the trendline break and the 3900 before going higher. Market indecisive right now sifting through a lot of data.
