Market consolidation and a big miss from the Jobs report

Good morning fellow traders and a happy Labor Day! We had an eventful week on Wall Street which culminated with the August Jobs report on Friday. We ended last week on a positive note as the $QQQ and $SPY showed impressive strength. We decided to add to our positions in tech on Friday’s close and were rewarded on Monday’s rally. We began trimming as this rally started to feel a bit extended and we knew from before that investors will be eager to secure profits ahead of the end of the month and the Jobs report on Friday.

We managed to post an impressive gain for our portfolio as we exited most of our portfolio positions by Wednesday and started to re-test some levels on Friday after the Jobs report. All in all, it has been a consolidation week for the indices and once again our approach proved to be successful as we easily beat the returns posted by the main indices.

Our biggest winners of the week have been $AAPL, $AMZN, $FB and $BTC. Please see below their respective charts, and how we approached them.

$AAPL chart

We loaded up on Friday’s close on $AAPL as the option expiration took the stock to an attractive level. We have been rewarded as soon as Monday as the Iphone giant managed to post a new all time high. We reduced our exposure and eventually exited our position by Wednesday. This was a great win for us, and a tactical move. On Friday, after the Jobs report we added some exposure to this name again, but will keep it in a tight leash.

$AMZN chart

$AMZN has been our biggest winner in August and we managed to secure another trade before it took a well deserved paused after an impressive rally from the reversal at 3180. We exited our call spreads for 5 times the profit on Wednesday as the price action was very extended from the moving averages. We added some stock on Friday, as it showed relative strength after the Jobs report. We will continue to watch this stock and possibly buy an extra set of calls when a better set-up occurs, possibly closer to its earnings day.

$FB chart

We loaded up on $FB on Friday’s close as a similar strategy to $AAPL as we expected the social media giant to post a new all time high in the coming sessions. We were correct in our assumption and we exited our calls and stock by Wednesday in order to avoid a pullback to the moving averages ahead of the end of the month and Jobs report. We are once again long $FB after Friday’s impressive reversal and will look to add more if it manages to reclaim 378.

$BTCUSD chart

We managed to play $BTC’s channel very well as we have been adding on weakness in anticipation of a breakaway move. We were constantly watching Ethereum as it lead the way to new highs above the recent channel and we kept adding to our exposure through mini futures. This weekend, it finally managed to get above and stay above 51K and we will look to book some profits and keep a trailer. The next big resistance area is 53.2K.

For the current week, we are cautiously bullish, as this is a short trading week given today’s holiday. Historically, this week is characterized by a poor performance and we continue to be on our toes trying to avoid too much exposure until we get a clearer signal from the market. The disappointing Jobs report miss is a big headwind, but it should allow the tech sector to continue higher, as the FED has the perfect alibi now to postpone tapering and most importantly interest rates.

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