We got another strong week out of the market which all started when CPI came in light 2 Wednesday's ago and the market was able to gap higher and hold the gap. Since we have pushed higher everyday except Friday where we finally found some weakness. The indices are somewhat overbought still and badly need digestion and chop to power up for the next leg higher. We have a huge week of earnings on tap -- specifically out of TSLA, META, MSFT & AAPL, which are all Tuesday/Wednesday. These are big percentages of the broad market at this point, so their morning gaps will absolutely effect SPY/QQQ morning gaps. For reference, AAPL is 8.77% of the QQQ, MSFT is 7.65%, META 4.85% and TSLA 4.06%.
I'm personally heading into this week much less in 'attack mode.' SPY got that move to resistance at highs, now think it needs consolidation or a slight pull in to charge up for the next leg. I counted 13 actionable setups in last week's letter with 10 working well (BE, LEU, OKLO, PSTG, ONON, RBRK, TWLO, HIMS, DASH, AVGO) and 3 failing (TSLA, SG, ALAB). This week's letter only has 3 clear cut technical entries (DOCU, DDOG, GOOGL.. maybe AVGO & NFLX). I promise I did the same amount of research 😂. My style of trading has generally taught me to be aggressive when there's tons of setups heading into a week like the last one. Now heading into this one with much less actionable setups, I will be much more reserved in the first half of the week while I sit in swings (BE, AVGO, ONON, GEV, VST).
We have PCE Friday morning, other than that we're pretty light on the economic calendar. With around 250 companies reporting this week, there are sure to be a ton of stocks flying around. The bulk of the money I've made over my career has been from keeping a pulse on the best acting earnings names and pouncing when they make moves off support.
Let's checkout some charts.
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