Daily Plan 7/19 '22

Folks-

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My plan last night called for this market to have a tough time finding bidders above 3880.

We opened the session around 3900 and this is when I sent this tweet below as I expected a test of the overnight lows. After balancing for about a couple of hours, the market made a beeline for these lower levels, and in the process it gave up that 3860 support to trade as low as 3820 and closed the session round 3830.

Tweet Update

In fact the sell off started when Bloomberg reported that AAPL is going to slow down hiring and slow down spend on several of it’s divisions in anticipation of economic slowdown. The conditions were already ripe for it, the market just needed a little push from some where.

In fact this is the sort of action I had been warning about on Friday , yet we miraculously hung around this level due to Friday pump and today as well I was one of the only few accounts to be remotely bearish as most were very bullish.

Here is a copy of my plan from last night and the significance of these levels: Weekly Plan

There seemed to be some confusion on my note about NFLX last night so let me clarify for any one who may have this same question.

Regarding NFLX, on a longer time frame level, I do think we are close to a longer term bottom at 160/170. Now we are at 190 right now. We are already up quite a bit from when I mentioned about this bottom several weeks ago in this Substack.

For tomorrow, will I be bullish at 190? To begin with I am not too bearish on NFLX (compared to some other names) but that is not to say it won’t sell off if rest of the market does (but it may outperform the market). Now, for shorter time frame swings, I think if 180-185 holds on this, I could see a run up to 210-220+. The reason being I think the market has overreacted to the sub loss at the NFLX and I think some of this may get corrected in the short term.

Image source

For Tic the longer term investor , any sell offs on this name into 160-170 are welcome. Trader Tic will keep a tight leash on this at 185 if he were to be bullish on this at 190, a day before the earnings. Hope this made sense.

Other names shared by me last night also did quite well. TSLA for instance the high of the day was 751 which was a key level shared as resistance.

Oil staged an impressive rally along with oil stocks like OXY, TLT came off a little. SAM stock also rallied about 20 dollars today.

Overall this market is range bound in shorter time frames. I think we could get a clear sense of direction in this couple of weeks once these mega cap earnings as well as FOMC is behind us. You can see this in Chart A below. Despite impressive sell off today, the volume was pretty anemic , a sign of lack of directional clarity.

I personally think we may start getting a sense of clarity and a break of this range we have been stuck in lower once names like AAPL and TSLA report. As always be the first one to know my thoughts, subscribe below.

Chart A SPY is range bound

Now I mentioned about 3880 resistance in SPY last night and we sold off today. The market does not go up (or down) in a straight line and sometimes you just have to wait for the actual auction to wrap up before you can make any sense of where the next few hundred points may come off.

While today’s sell off was impressive, and we got a multi nodal profile shape as in Chart A above, I did not like the fact that the volume was quite anemic today.

This leads me to believe we may balance tomorrow, especially in light of the earnings ahead.

My levels and scenarios for tomorrow:

My main thesis is that ahead of key earnings like NFLX tomorrow we may be balancing between 3880 and 3810. The market last traded 3835 at time of this post.

Scenario 1: Dips, if any into 3810 may be bought for a retest of key order flow level 3851.

Scenario 2: If we open or bid above 3851 tomorrow, 387X/3880 may offer some resistance for a move back down into sub 3851.

I will be curious where we get the 3 PM cross tomorrow as I think if NFLX beats, we may see a bounce off this level, albeit temporarily into 3880-3900.

Any updates, and especially if we open outside of these levels, will be shared by me on Telegram and Twitter. Stay tuned.

~ Tic

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