The markets are unforgiving, and emotional trading always results in losses. Alexander Elder
Happy Sunday
We have a big week ahead with earnings and economic data. Even though earnings have been coming in strong their are plenty of things for the markets to be worried about.
Another potential government shutdown, trade war tariffs, Fed rates hikes after a strong GDP number, mid term elections just around the corner and August September and October historically being the worst months for stock market performance. There are reasons to raise the caution flag and there could be some opportunity in volatility plays as well as some bearish ETF's for short term trading plays.
There will be trading opportunities with both longs and shorts off the earnings that hit this week. just make sure you always have a plan. Never chase, know your risk reward, define the trade and be patient.
Oil and energy the sector continues to consolidate after the recent run we are seeing some short term lower highs lets see if there are lower lows on the horizon >for now it is probably best to sit on the sidelines. There could be catalysts if things really heat up with Iran.
Financial stocks have had a nice bounce and with the Fed on deck they could get some follow though if the Fed comes across as hawkish suggesting continuing rate hikes. The strong GDP number may bolster the hawkish stance
Homebuilders >a hawkish Fed statement could put more pressure on this already beaten up sector. Trade war impact on costs, inflation concerns, rate hikes, price concerns and lack of inventory have been weighing on the sector. We also get pending home sales which could provide a catalyst this week. If we see what could be considered bad news and the stocks either maintain these levels or bounce we could be finding support for a potential long play 38.50 area has been support and needs to hold
Semiconductors which have been a leading sector for the last several years has seen some recent pressure but continues to hold above the 200 day. I did notice there were some semi stocks that reported good earnings and had some nice upside price action last week. LSCC CY are two that stand out. The sector itself is still in an uptrend but could see more pressure if tech continues to struggle
Biotech Potential double top and there is a gap to fill on the daily. I would look for support at around the 111.80 112. where the gap fills and you have the 50 day as potential support area if that fails to hold we could see a pull to the 108 level and a 200 day test for support
Small caps were recently leading the markets and have now taken a breather we closed below the 50 day on Friday and that puts the IWM on the guilty till proven innocent list for the near term. I will be looking for potential price support in the 160 area if that fails we could be looking at a 200 day test
If we continue to see weakness in the IWM there may be a short term trading opportunity in TZA this is meant to be a short term trading vehicle so play it accordingly and size appropriate. Testing a 9 roll, a 50 sma cross and just broke a down trend line
If the weakness from the end of last week follows through there could be a trading opportunity in TVIX and UVXY these are also considered short term trading vehicles
Transportation had a nice run right into potential trend line resistance. We may just consolidate in this area watch the 50 day for potential support
Consumer Staples > after a nice run recently we are testing the 200 day as potential resistance. We may just consolidate here and a pull to the 50 day would not be a big shocker
Industrials have also had a nice run recently we have some big name sin the space reporting again this week. We broke the down trend line however the sector could be a bit extended in the short term. The 77 level could act as strong price resistance.
EA reported and disappointed last week ATVI and TTWO report this week The sector currently looks like its bear flagging just on top of the 200 day and a long term tend line we could see some near term weakness if earnings disappoint from two of the biggest players in the space.
Disappointing earnings from FB TWTR and NFLX have put some pressure on big tech and with TSLA and AAPL reporting this week it could get a bit more dicey for the tech sector if their earnings disappoint. Watching the 175 area for potential support along with the 50 day. If we lose that the next area of potential support may be the 170 area
SPY watching the 275 -280 area for potential support.
Sample list of stock to watch off this weeks Pro member video
$NGVC $MEET $ESND $CHK $ABCD
Earnings this week Wed before the open
Earnings Thursday
Earnings behind them with a nice beat potential pull back bounce play
Earnings behind them nice break on Friday
Earnings Wednesday
Highly anticipated earnings next week
Source Earnings Whispers
NEXT WEEK'S MAJOR U.S. ECONOMIC REPORTS & FED SPEAKERS
TIME (ET) REPORT PERIOD ACTUAL FORECAST PREVIOUS
MONDAY, JULY 30
10 am Pending home sales June -0.5%
TUESDAY, JULY 31
8:30 am Employment cost index Q2 0.8%
8:30 am Personal incomes June 0.4%
8:30 am Consumer spending June 0.2%
8:30 am Core inflation June 0.2%
9 am Case-Shiller home price index May 6.4% yoy
9:45 am Chicago PMI July 64.1
10 am Consumer confidence index July 126.4
WEDNESDAY, AUG. 1
8:15 am ADP employment July 177,000
9:45 am Markit manufacturing PMI July 55.4
10 am ISM manufacturing index July 60.2%
10 am Construction spending June 0.4%
2 pm FOMC announcement 1.75-2% 1.75-2%
Varies Motor vehicle sales July 17.5 mln
THURSDAY, AUG. 2
8:30 am Weekly jobless claims 7/28 --
10 am Factory orders June 0.4%
FRIDAY, AUG. 3
8:30 am Nonfarm payrolls July 213,000
8:30 am Unemployment rate July 4.0%
8:30 am Average hourly earnings July 0.2%
8:30 am Trade deficit June -$43.1bln
9:45 am Markit services PMI July 56.5
10 am ISM nonmanufacturing index July 59.1%
Source MarketWatch.com
