Good evening everyone , hope your all doing well. As pointed out in the last post, the market was looking pretty weak , and showed signs of continued downside. In this post we recap some key downside levels to watch out for, and in a post later today , we will review some favorable stock picks for the upcoming week.
As always we will begin by looking at my favorite , the S&P 500 , in the form of /ES futures and $SPY. If you recall from the last post I put out, I favored a continued downside move off the 3822 /ES bounce rejection.
As pointed above , we did indeed get our break under 3750 and found ourselves making new lows , a nice +50 point or $5 spy short play given on a silver platter 😯
/ES - Hourly chart until 1/29
As depicted above , we had our initial break back under that 3748 around 10 PM EST (or Thursday night) , then based under until we slowly worked ourselves back up before market open at 9:30 AM EST (Friday morning). The market continued to show signs of weakness even with it opening over 3750 , so we took some small shorts into 3780 , with our trailing stops at 3790 and then waited for CONFIRMATION on the break back under 3748 at 11 AM EST(the red circle). Now the fun began. As mentioned prior, that level was a crucial one and getting under after opening the day over, gave the bears the momentum they needed to (as stated in the blog) , make a new week low 😯.
Volatility stocks such as $VIX and $UVXY continued to hold and rocket higher, while the rest of the market followed to the downside. No surprise there 😎. With that out of the way here are some key levels to watch for on /ES and /NQ. /ES you want to see if we can recapture 3703 on a daily close , which doesn't seem super likely. Then we have minor levels around 3685 , 3673, and big buy zone into 3660 and 3625 (more clear levels stated for spy). In terms of $SPY , these levels equate to , capturing a daily close back over 373.55 , while downside we have 368.01 and then 363.97 as the big buy zone. The 364 SPY level should give a nice bounce play 90% of the time , so definitely keep your eye on that one. If we close and hold daily under that , things can get very ugly , very quickly.
$SPY - DAILY UNTIL 1/29
For tech and $QQQ here are some key zones to keep your eyes on. Starting with /NQ we have buyers around 12647 (for a daily close) , if we break that then 12458 and 12319 with 12100 on the low end for now. Of course we can break lower, but I don't expect any lower than 12100 this week on tech. The QQQ levels roughly equate to 310.28 , 306.5-307 and then 302.55
$QQQ DAILY - UP UNTIL 1/29
That's it for the indices , and now we can get into a the watchlist from Friday.
DAILY PLAYS: Not much was on my eyes from 1/29's open , but the downside continuation for $SPY and then $SKWS $MRNA and $FUBO.
$SWKS - Skyworks was on our morning watchlist because they completely blew away the earnings report. As a result this gave us an opportunity to trade some liquidity on the stock. We wanted to play the upside from this strong report, but the only negative was that the market as a whole wanted to tank. So their was the opportunity to play quick for a scalp or just leave it.
$SWKS - ONE MIN 1/29
As seen above , we had a quick sell off on $SWKS from open , but we came right into that 179 buy level. This gave an opportunity to go long , and off the level we continued to a high of 185 , just about $6 pop. Off the initial bounce we realize that we cant hold back over the 183.3 , giving us our first sign of weakness. After we reject the 183 we dip and bounce again off 179, but this time we fail at 183.3 again (the boxed zone), this gave us some necessary information on the weakness present, as buyers were failing to hold higher. After that 2nd rejection we broke support and dipped right back towards the 166 key level. If your watching this stock next week , if 166.64 hold, can be a great long play (would be higher probability if market bounces). For the most part this would have been a scalp play , take some quick gains , keep stop at breakeven and move to the next.
$MRNA- Moderna also had a nice, what seemed to be , news related spike, as JNJ vaciness weren't seen to be as effective as MRNA's vaccines. Off the news we made a premarket high just over 218. Meanwhile , we opened just into the first support off 170.
$MRNA - ONE MIN 1/29
As seen above $MRNA also opened at the 2nd better buy level, and off it we shot up a nice $15 giving a beautiful trade. Even with a great buy presence off open , we just weren't able to hold. The reset of the day we kind of of just fizzled out , holding between 174 and 167 after the initial up move.
Other than these 2two, there weren't many higher quality trades, of course, except for the continued downside shorts 😎. We decided to just stick with spy and rode it down into 368 and then played puts again off the pop into 373,55 (discussed above ).
Hope this helps put together some questions you had from the past week, and if you have any other questions , please drop them below :).
If you appreciate the post , don't forget to like and follow, as i will have a weekly watchlist post up later tonight !!!
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Hope you all have a wonderful rest of your weekend, and a great upcoming week :)
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