This weekend, I'm giving you a taste of something new: an inside look into what I see and what I'm thinking. Remember, this is not trading advice but an educational resource to help you build your own trade ideas using the wisdom and experience I've gained over the past couple of decades in the market!
I'm I sharing my insights on the stock market with a little more bias that I think will make you money or help you learn how I've built wealth. My goal is not for you to follow my trades blindly but to help you learn from my experiences.
Weekly Charts Update
Spy- Weekly Chart
I'm not bearish on SPY; I'm simply stating why I'm not adding too much risk. The RSI is showing we're overbought, this is a wave 5 on the weekly, and we are really extended from the moving averages. SPY is up 20% this year. You can see the obvious decline in volume, which is normal because of the summer.
QQQ Weekly Chart
Tech is outperforming SPY by an additional 5%. QQQ is up about 25% so far this year.
Keep in mind, QQQ's top holdings are 8% in AAPL, MSFT, NVDA, and 5% in AVGO, AMZN, and META. So 40% of the index consists of those six companies!
With tech earnings coming up, the bar just gets higher and higher for these giants. Even if the companies keep doing well, the law of large numbers is a headwind.
I don't mean to sound bearish. I'm cautious and looking to collar my tech holdings. Collars or super collars are a GREAT idea if you have 100 shares!
IWM Weekly Chart
I've been saying for the last couple of months IWM (small caps) will benefit from a rate cut as these small companies use debt in their company to grow. We are starting to see the breakout. If you have no exposure consider buying a dip? Do you notice how resistance becomes support? look at the bold purple lines.
GLD Weekly Chart
I left that morning star reversal (the purple circle) right off the 100 and 200 on this chart because LOOK FOR THIS ON OTHER CHARTS!! TRADE IT IF YOU LIKE MONEY. ok enough yelling but i get so darn excited. READ THIS BLOG ON MY FAV PATTERNS!
Please look at the consolidation of GLD here (in between the two red lines). Look at what RSI, it moved from overbought to more in range just from sideways movement.
Will the purple squiggle play out? I think GLD could be a good bullish trade with fears of a possible recession?
TLT Weekly Chart
I've been bullish on TLT for months. I've written about it in every Good Kids Only newsletter.
When TLT pulled back last week i bought more right off the 10EMA... There is a weekly 100 moving average right on top of us, there could be some resistance but I expect TLT to continue going higher as rates get cut.
Here's a few interesting charts with an explanation on what I see
MCD- Last time MCD hit the weekly 200 was in 2020. Is this a good time to try a bullish swing trade? Check on smaller time frames and you'll see a morning star reversal on july 8,9,10.... You can probably figure out I'm in bullish (with a stop of course).
NUE- how many times has nucor hit the blue line and bounced? Granted it actually closed below the blue line a couple times it's retaken the trend. The only problem is earnings are coming up. Maybe a defined risk trade?
SPYD- Will there be a rotation to dividends for fixed value investors when SGOV stops yielding as much? Is this a buy the dip opportunity? The first trade I'm showing is a monthly candle. The second trade was a breakout, but now it's a buy the dip if you aren't in.
This week, I'm looking at banks reporting earnings. On Friday, we saw reports from JPM, WFC, and C. This gives me a good idea of what to expect this week. I know volatility was reduced for all the banks after Friday, but that's alright.
I don't love C or WFC because C has so much international exposure, and WFC opening all those fake accounts just rubs me the wrong way. Besides my personal bias that Jamie Dimon is a bad@$$ CEO, I also look at the Price to Book ratios of banks to figure out which ones I'm most interested in selling puts on or looking for opportunities.
You know I like support and resistance levels and moving averages too. Here's what I see in FINVIZ for banks reporting this week.
Bank | P/B |
JPM | 1.84 |
WFC | 1.2 |
C | 0.65 |
PNC | 1.49 |
BAC | 1.23 |
RF | 1.22 |
USB | 1.35 |
ALLY | 1.15 |
SNV | 1.39 |
FNB | 0.86 |
OZK | 0.99 |
If you can find a low price to book and see a good trade: Take it? I am...
Other trade ideas for this week
UNH reports this week. I know they had some security issues, and I know it's an expensive share price. I also know how many people use them for insurance, and I will look to get back in after earnings.
SCHW - Although I didn't like their login issue, this is a good company with a lot of assets under management. I'll be looking for trades AFTER earnings.
Amazon Prime Days - Is there a trade here?
I know the market is forward-looking. I understand people are really smart and have already thought about this. I still want to watch Amazon this week as it’s having its 8th Prime Day. I quickly looked back since 2015 when AMZN started having Prime Days, and honestly, the last few years have been bullish, but the market has been pretty bullish too.
With Amazon at ATHs, I’m not looking to add more (I have a lot of AMZN shares). I thought this was interesting and wanted to share.
AMZN Monthly with Prime Days
AMZN weekly with the last three prime days
In terms of 'news' there isn't too much coming up this week.
Can I end with a small rant? Of course I can; this is my post.
There's a big difference between listening to the news for relevant information and reacting to the news. When people say they don't pay attention to CPI (or news) and just trade their plan, that's just ignorant.
Do we know how the market will react to good or bad news? NO. But is it important to understand what rising CPI means to the market? Ask everyone who lost their accounts during this last rate hike.
Please pay attention to the market cycles and news. Do NOT REACT out of FEAR, but keep yourself informed.
With that, I'll see you next Sunday.
Happy Trading Good Kids
Mr $ Maxwell
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