Criteria for Bear flag look to be forming on /ES daily, Massive volume sell off, brief consolidation & continuation looks imminent, though there is some recalcitrant strength to the upside today in what could manifest as a vicious relief rally. Caution, as always, must be exercised. Every individual is seeing a gap up, gaps back to back over the last few days—is this what the volatility of a bear market brings as a standard? Need to study the charts of the 70’s stagflation as well as charts of recessionary periods. Information technology & financials seem to be the largest of the gap ups, following with consumer staples & consumer discretionary.
Information Technology
- Consistent grinding up after hours & pre market. /ES near critical 3700 level, if it can hold above this there may be no immediate obstruction for some upside flourishes to present themselves in this sector.
- ORCL | Approaching considerable 70 daily level. If market strength holds & name surpasses this level, could be room for upside. However, there could be swift rejection at this level if /ES cannot maintain its strength above 3700. Given the overall downtrend, be exceedingly cautious trying to play any upside move, it will likely be short lived & serve only to trap you.
- NVDA | Similar to ORCL approaching 160 level from which rejection is likely if /ES unable to hold 3700 level. Gap down.
Communication Services
- Yearly lows surpassed yesterday, with some reprieve at end of day
- META | Surpassed & hovering above significant daily level in pre-market. Contingent on market strength, but if it can hold above it’s daily level, could see a move up. Given that it broke this level yesterday however, if there is weakness in /ES which seems imminent, then the barrier down for META is weakened & likely to collapse.
- VZ | looking to open near significant 49 level, just like yesterday, from which point it was rejected & sold off considerably. Similar price action could manifest today & supply in /ES seems to be overtaking demand at 3700 in premarket. May be wise to commit more to your bear side bias plays.
Consumer Discretionary
- Same as Communication services, yearly lows surpassed with a bit of a reprieve at EOD.
- HD | Looks like same play could manifest again similar to yesterday, premarket strength butting into 275 daily level, however yesterday it was premarket & afterhours weakness that preceded the dump. Hesitant to play this because of psychological barrier of not wanting to lose on a name I just won on yesterday. If I do play, I would want to commit to a much smaller size, as I’m want to do on every play today to ensure I end my week on a high note, whether I win or lose today.
- AMZN | Perhaps you can get the sector exposure you’re looking for without the psychological barriers you’re carrying from HD. Nothing outstanding here.
Consumer Staples
- Yearly lows surpassed yesterday, but index bounced back & closed green.
- WMT | Approaching 121 daily level in premarket, closed green on strong volume yesterday just below this level & briefly surpassed it intraday. Given weakness in /ES it seems more likely that this 121 level rejects, & the level itself could be a good risk management level to play from. However beware a morning spike above the level. give time to open.
Energy
- Stumbling in its prior dominance. Closed red on considerable volume yesterday
- XOM | Approaching gap level which if filled could see nearly 2 point drop to 88.5. Considering weakness in market & in oil, this could be promising move.
- CVX | Broke below significant 156 level yesterday but retraced. Below this level is a steep drop, with price action in the past year sending this name straight up from 140 to 156 on all green days. If this zone falls as easily as it rose it could be a splendid opportunity. 156 is a good risk management level to play from.
Financials
- Similar to other indices, surpassed yearly lows, but bounced back on considerable volume. Closed red.
- JPM | If weakness in market persists, 115 daily level could be good zone to follow downward momentum of market from.
Industrials
- Week yesterday & considerable red close at all time lows
- BA | Opening near 134 level which could be good risk management place to play from. Considerable weakness yesterday at this level, testing it but unable to overcome.
There is clear weakness in the indices, but we are at a critical daily level of 3700 around which there is bound to be churning. Do not be goaded into action until clear direction presents itself. Today is also quad witch day, which seems to consistently exhibit higher volatility. You’re in shares, but nevertheless, exercise caution. Trade smaller than you might on other days. End the week on a high note.
META Above daily 162 levfel in premarket
BABA showing massive gapup & strength in premarket.
WMT rejecting 121 daily level in premarket
CVX premarket strength, but tepid, looks to be opening above 156 which could be good level to play off.
JPM Opening near considerable 115 level, but below. could be good area to short from. GS continued upside strength from yesterday
NVO Look into it ABBV as well
UPS GAP FILL POTENTIALLY IMMINENT> REFERENCE DAILY. BA showing some strength but nothing inordinately attractive