Glass half full?

Good morning fellow traders,

Yesterday the bears came back and pushed the indices lower as $FB’s earnings became the focus of the tape. The Nasdaq posted one of its worst days since the beginning of the pandemic. We managed a few day trades in $DWAC, $TSLA, $AMD and $GOOGL before we got out of the way. Booking profits and remaining tactical helped us protect capital.

After the closing bell, the mood on Wall Street reversed once again. $SNAP posted its first ever profit and the shares of the social media company jumped 40%. The cherry on top of the cake was $AMZN. The e-commerce giant easily beat estimates as its EPS was boosted by a sell of its stake in $RIVN, the electrical vehicle start-up. Revenue and guidance came in line, but the overall beat pushed the price of $AMZN $500 helping the entire tech market. On news of this beat, we re-engaged $AAPL and $GOOGL, two other tech companies that posted impressive quarterly results in the past week.

Our focus today will be on managing our $AMZN calls. We are long the $3175 calls expiring today, and depending on the open, we will look to book them for impressive gains. Never count your profits before you book them, but given the strength exhibited last night, we expect to at least double them. More on that, on our Twitter account, where we will post our actual trades.

The wild intra-day swings are becoming more common in 2022 and traders need to be on their toes daily in order not to lose opportunities or get trapped on the wrong side of the trend.

For today, see if the tech sector can reclaim its 200EMA around $363 in order to close this tumultuous week on a positive note. We are still not out of the woods and the recent action is not very constructive. Irrespective of that, there have been plenty of opportunities to create some profits given the high volatility.

Before the opening bell we have an important jobs number which will be digested by analysts. The consensus for the Non-farms payrolls stands at 150.000. A big miss, given the recent Omicron debacle might send conflicting signals to Wall Street. A smaller than expected number may be seen as an opportunity for the FED to dial down on its hawkish tone, which at this point seems unlikely. A big beat, will on the other hand push the inflation fears to new highs.

$QQQ chart

As soon as $AMZN posted its quarterly earnings, the tech sector got a boost and quickly reclaimed $360 in after hours. For today, with futures up, see if early strength builds on the recent positive news or not. $361.9 is the first resistance area with the 200EMA just above at $363.5. We are long $AAPL, $GOOGL and some $AMD and $AMZN calls in case tech gets a strong bid. An inside day, within yesterday’s candle is not out of the question given the fact that options expire today and we also have an important jobs report number.

$SPY chart

The overall market drifted lower on $FB’s weakness. It got a boost in after hours as it reclaimed $450. For today, see if we can push above $453. $456 is the next big resistance area. A lot will depend on whether $AMZN can push higher throughout the day or if sellers come back after the initial gap up. The jobs report and its implications will be the main driver for today. $448 should offer some temporary support.

$AAPL chart

$AAPL continues to act well given the weakness in the overall market. Yesterday’s candle can be seen as a reversal one, but given the upbeat mood in after hours, we have decided to remain engaged with this name. For today, our stop loss will be set at yesterday’s low. For better action, see if $175 gets reclaimed for a possible move to $177.

$AMZN chart

$AMZN will be the most important barometer of the day. It went as high as $3300 in after hours before losing steam during the conference call. Investors were somewhat disappointed that a stock split was not announced. The first resistance area is $3175 before the big one at $3300. The big question is whether sellers will push the price of the stock down throughout the day or if analysts will upgrade their prices and $AMZN will finally reclaim the recent downtrend line. We will look to book some early profits from our calls and leave a trailer in case it gets going throughout the day.

It has been a wild week on Wall Street. We hope we managed to guide you as well as possible and that first of all managed to protect your capital and took advantage of the recent bounce in names such as $GOOGL and $AAPL. We remain cautiously positive going into today’s action. For our live updates please follow our Twitter account and join us for our live video.

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