Yesterday went as I have anticipated in the Daily Charts, with futures up the key levels were touched in $QQQ and $SPY, but towards the end of the tape the bullish actioned waned and tech got softer. When they reached the key levels mentioned yesterday I went long $MSFT and $AAPL and I trimmed along the way until I got left with trailers. Unfortunately the $QQQ lost the $363 and this made me get out of my longs in tech, since all the action will be happening today at the big jobs’ report. If we get a soft number or if it’s a goldilocks report tech should get stronger, if not, stay out of the way. The $SPY however, proved to be stronger and it did not lose its key level of $437. I am very light today position wise, waiting patiently for the numbers, if the reaction in tech is positive I will load up, if not I will reposition myself towards the banking sector.
You can see the red gap Alex drew on this chart, remember the levels and be mindful of them because if the gap gets filled again to the downside, the drop can be even more aggressive than the previous one. If the reaction to the report is positive you can easily see the $SPY surpassing yesterday’s high and going towards the $444 level. If you want to play the index you can buy some call options for today for $444, for some cash flow. Otherwise watch $437, if it goes lower than this level and it stays under get out of longs as this action can turn ugly quickly.
The situation in this neck of the woods is slightly more negative. We had a feeble try in tech to fill this gap between $360 and $366 but we did not get there yet. Not only did we not get there but we got an ugly doji. This made me get out of my tech longs and wait patiently for a more compelling pattern. The goal for today is to get above and stay above $366.18, which means above all moving averages. Should we not get there I will stay away from tech. However, if we get a soft jobs report and tech decides to lead and get above those levels I will get more aggressive wish my longs for the weekend. I would look at $AAPL, $MSFT and $AMD for some cherry picking if we are in green territory.
$TSLA has been staying in this range for the past two weeks and I did not touch it in the past days. I just have a small call spread for today in case it gets a positive reaction after yesterday’s investors’ day. I tried to engage it yesterday when it spiked but I retreated towards the end of the tape as I do not enjoy staying in stock for a binary event. If it manages to push past $806.97 you could see an aggressive move towards $821 and higher, towards its all time high of $900. However, if the reaction is negative and the market will be weak today this active session in $TSLA might end and we could see a sharp drop. Wait patiently until we see a clear direction and then engage it for a nice ride to all time highs, if this proves to be the situation. [This is my favorite stock to trade both long and short, and if it breaks under the moving averages I will not be shy in shorting it until the 21 day EMA and even lower, if this is the case.]
Today’s catalyst is the big jobs report. I recommend you take no action until this inflection point as you are in uncharted territory. The woods can get thicker and more menacing depending on the numbers, or we can finally chop some wood and bring it home. Don’t rush into anything and follow the trend as it will be a well defined one after the news hits at 8:30am ET. The indices should show you straight away the direction for you to take and watch the levels I mentioned above since they will be a guiding hand in today’s tape.
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